National Grid plc isn't the only dividend king I'd buy today

dividend king

For those seeking reliable earnings and dividend growth in turbulent times, it's hard to look past National Grid(LSE: NG).

It goes without saying that electricity is one of those commodities that we Britons cannot go without, regardless of whether or not the domestic economy is failing or thriving. So with GDP growth starting to stutter (this rung in at a pretty-insipid 0.4% for the third quarter), and the never-ending Brexit saga threatening keep economic expansion reined in many years yet, now could prove a sage time to plough into the utilities space.

The likes of Centrica and SSE face an uncertain future, however, as the embattled Conservative government, eager to re-seize the initiative from the Labour opposition, vows to implement price caps on Britain's leading power suppliers.

National Grid is insulated from the worst of these troubles, however, given that it does not sell electricity to hard-hit consumers, but simply keeps the electricity grid up and running. And therefore its profits outlook is that much more stable.

Power up your investment returns

Such earnings visibility is of course essential to keep dividends on an upward slant and has given National Grid the confidence to keep raising payouts at a pretty decent lick.

And thanks to the stable operating environment, the City is certainly expecting rewards at the London-based business to keep sprinting higher. The 44.27p per share dividend shelled out in the year to March 2017 is anticipated to rise to 45.3p in the current period, and again to 46.8p next year.

As a consequence, yields for fiscal 2018 and 2019 rock up at a terrific 4.9% and 5.1%, respectively.

Make the connection

My bullish assessment of big-yielder Connect Group (LSE: CNCT) has also improved immensely in recent days following the release of full-year financials. And so has that of the broader market.

The distribution giant has seen its share value explode 25% since Thursday's update, share pickers piling in after it said heavy restructuring measures would drive it back into earnings growth from this year.

While market conditions remain difficult at the business (revenues and adjusted pre-tax profits dropped 3.1% and 2.8% correspondingly in the 12 months to August 2017, it advised this week), Connect has now embarked on a two-year transformation drive which will encompass the "comprehensive integration of our core businesses, extending from leadership and central services through to the network and frontline delivery." Its decision to focus on Early Distribution and Mixed Freight divisions should create a leaner and more effective earnings generator in the years ahead.

Connect kept its record of handsome dividend growth rolling by electing to lift the shareholder reward to 9.8p per share for fiscal 2017, from 9.5p in the previous year. But brokers are predicting that the dividend will shrink in the current fiscal period, to 9.7p per share.

However, this figure still yields a formidable 8.6%. And I believe payout projections could be on the end of meaty upgrades in the months ahead, should restructuring measures begin to bear fruit. Indeed, the number crunchers are expecting earnings to move 7% higher in the current year alone.

Five dividend shares to make your fortune

As I say, I reckon both Connect Group and National Grid are terrific stock selections right now. And forward P/E ratios of 6.8 times and 15 times respectively make them worthy of serious attention.

But they are by no means the only dividend darlings out there.

Indeed, our analysts have been hard at work identifying a selection of the best FTSE 100 dividend stocks in the retail, pharma and utilities sectors, companies we are convinced should really kick-start your investment income. And they are revealed in The Motley Fool's  5 Dividend Winners To Retire On wealth report.

Click here to download the report. It's 100% free and comes with no further obligation.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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