Bothered by Brexit? A FTSE 100 dividend stock I think could help protect your wealth
Brexit was always promising to be a tough nut to crack. But the disarray that the 2016 European Union referendum has subsequently wrought — among the political class in Westminster, and for businesses the length and breadth of the country — has been nothing short of breathtaking.
The scale of the problem was neatly summed up by John Allan, president of the Confederation of British Industry, who this week described the situation as a “national emergency” and, again, warned of the dangers of a no-deal withdrawal.
I remain confident that Westminster can pull us back from the brink and save us from a disorderly Brexit. But nothing can be ruled out, of course, and a safety-first approach may be the most prudent. And a great way for share investors to insulate themselves from the trouble caused by the tense political and economic backdrop is by buying into the FTSE 100.
Heck, there’s plenty of brilliant shares on London’s top-tier index that promise to make their shareholders a fortune, irrespective of how Brexit turns out. And particularly for those seeking great dividend payers.
Over and out
One of these bright income heroes I wish to talk about here is Reckitt Benckiser Group(LSE: RB). The household goods manufacturer has been making the headlines in recent days following news that chief executive Rakesh Kapoor will be leaving his post at the end of 2019, after almost a decade at the helm.
The search is now underway for a successor, the Footsie firm advised, creating no shortage of uncertainty over the direction of the business, and which caused Reckitt’s share price to dip. I’m not concerned, though, and believe Kapoor’s transformative action while in the hot seat, and particularly in making it a heavyweight in the fast-growing consumer health segment, should set the company up for many years of powerful profits expansion.
Titanic names like Durex, the number-one condom brand in China, perfectly illustrate the strength of Reckitt’s packed portfolio of market-leading brands, as well as its bulging exposure to developing markets. These are qualities that have already underpinned the company’s long track record of exceptional earnings growth.
Saving your bacon as Brexit bites
It’s no surprise then, that City analysts believe it should keep the bottom line bulging, irrespective of any slowdown in the global economy. Current forecasts suggest that the Footsie firm’s earnings will rise 9% in 2019, and by an extra 8% next year.
What’s more, this bullishness leads to predictions that Reckitt’s progressive dividend policy will remain in play, too. A 168.6p per share payout is predicted for the year just passed, a figure that’s anticipated to advance to 181p in 2019, and to 195.8p in 2020. And this means the company carries chubby, inflation-smashing yields of 3% and 3.3% for these respective years.
Given that the UK is responsible for just a fraction of the world’s total market for consumer goods, it’s no surprise then that the number crunchers are confident enough to predict further profits growth in the medium term, irrespective of the Brexit-related turbulence that’s growing in the UK. In my opinion, Reckitt’s stable of star brands, and its broad, pan-global footprint, makes it a brilliant way to protect yourself against the political storm here on home shores.
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.