SSE Dividend History

Based on the SSE, formerly Scottish and Southern Energy dividend history table below we can show you why we believe that from an income investing perspective SSE is an ideal candidate.

Latest: Comparing National Grid's dividends with SSE's

Scottish and Southern Energy - an example company!

Suppose you bought 1000 shares in SSE during May 1999. The group's share price fluctuated during that month between £4.16 and £4.50. Lets pick a ‘convenient’ date, say May 17th, when the closing share price was: £4.25 Excluding stockbroker commissions and any taxes, you therefore paid a total of £4,250.

Let's first check the dividend yield for 1999?

Check SSE dividend history table - you would have received a dividend of 25.7 pence per share for 1999.

Then, divide your dividend of £0.257 a share by your original purchase price of £4.25 and multiply with 100 and your (prospective) dividend yield at the time amounted to 6.0 per cent. Not bad at all!

Since, according to the Scottish and Southern Energy dividend history table, the Group has been paying a dividend consistently for the last eleven years - in fact:

SSE has increased it's dividend by an average of
12.5 per cent every year!

And what's happened with your dividend pay-out?

Based on the SSE dividend history table we can calculate that by:

• 2007 the dividend payout has more than doubled from over £0.257 for 1999 to almost £0.55 for 2006

• early 2010, when the final dividend for 2009 was paid, Scottish and Southern Energy’s dividend pay-out has increased more than 2.7 times since 1999 to £0.70 per share.

What has happened with your annual yield based on your initial purchase price?

You bought Scottish and Southern Energy shares in May 1999, paying £4.25 a share. Almost eleven years later, you’re receiving a total dividend payment amounting to £0.70 a share. Again, divide that £0.70 a share by your original purchase price of £4.25 and multiply with 100:

Your effective yield is now almost 16.5 per cent!

As long as SSE is able to keep boosting its dividend, and you keep holding the shares, there is no limit to how high your effective yield can go.

And what About SEE’s capital appreciation?

As per the Scottish and Southern Energy dividend history table SSE have increased their dividends each year, however it has also increased in value over time.

Remember 1999, in our example above, we were able to purchase SSE shares at £4.25?

Scottish and Southern Energy share price has been a riser ever since. From around £8.75 at the start of 2005 to approx £11.50 today (during 2010, SSE's shares where trading in £10.50 - £12.00 range).

SSE's value has almost Tripled since 1999!

Let me summarise this for you:

• if you had purchased 1000 SSE's shares over ten years ago, at a cost of £4.25 per share, your overall cost would have been £4,250 (excluding purchase costs)
• on average SSE’s dividend has risen 12.5 per cent per annum, almost 2.7 times from the 25.7 pence in 1999 to £0.70 per share for 2009
• whilst the share price also increased some 2.7 times from £4.25 at purchase to between £10.50 - £12.00 per share during 2010.

After just ten years of holding your Scottish and Southern Energy shareholding of 1000 shares:

• your shares are now worth approx £11.50 per share
• your total shareholding is now worth approx £11,500
• you have received dividends totalling £5,031 -in fact more than your purchase amount
• for 2009, you have received an annual gross dividend payment of £0.70 per share, totalling £700
• providing you with an effective dividend yield of almost 16.5 per cent.

Share your views on Scottish and Southern Energy.

Owning shares in a company such as Scottish and Southern Energy seem to tick all the boxes for an early retirement investor. However, we would like to point out that there is emerging evidence of a . . . .

Decelerating Annualised Dividend Growth Rate!

Before we consider the sustainability of Scottish and Southern Energy's dividend and its growth prospects, it's a good idea to first consider what's happened so far.

Over the last fifteen, ten and five years Scottish and Southern Energy's annualised dividend growth rate has been relatively stable, averaging 10.7 per cent, whereas the last three years the annualised dividend growth rate has decreased to 'just' 8.4 per cent.

While we believe that the dividend is unlikely to be cut anytime soon; due to benign inflation rates, we do not expect double figure dividend growth rates either.

Barring unforeseen circumstances, as per the recent trading update, dividends for the year ending 31 March 2011 remain on course to the stated target of a dividend increase of 2 per cent over inflation. As a result, we are pencilling in a dividend increase for the year ending 31 March, 2011, of £0.73 per share, i.e. a conservative increase of 'just'
5 per cent.

If, indeed, Scottish and Southern Energy continues to increase the dividend payout by (a conservative?) 5% each year, your annual yield on investment of 16.5% will grow to 17.3% (£730) and the following year to 18.2% (£766.50), etc.

As I said . . . Scottish and Southern Energy is an example company!

Return to Scottish and Southern Energy for more recent information on their dividend policy.

Return to Dividend Risers for information on other companies with an amended dividend policy.

Return to Rising Dividends for announcements from other companies with an amended dividend policy.

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