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The FTSE 100 index of UK shares is famed for its strong dividend culture. Muscular balance sheets, competitive advantages, and diverse revenue streams make many of them excellent buys for long-term passive income.
Take these three shares: Sage Group (LSE:SGE), BAE Systems (LSE:BA.) and Halma (LSE:HLMA). Between them, they’ve an aggregated almost 90 years of consistent dividend growth.
Want to know what still makes them five-star dividend shares to consider?
Sage — 35 years of growth
Dividends are never guaranteed for any stock. With Sage, its long history of payout growth could falter if the global economy implodes, taking corporate tech spending with it.
But what’s made it resilient to such shocks in the past? Its accounting, human resources and payroll software is essential for any business. This provides high-quality recurring revenues and cash flow, and makes it more resilient than most other tech shares. What’s more, its software isn’t especially expensive, which helps support a ‘sticky’ customer base even in tough times.
I’m optimistic Sage can keep delivering healthy dividend growth, as businesses increasingly digitalise their operations. I’m also encouraged by the FTSE company’s steps to embrace artificial intelligence (AI). The forward dividend yield here is 2.5%.
BAE Systems — 22 years of growth
Defence stocks are among the most reliable dividend payers out there. Their earnings are practically immune to broader economic conditions, given the importance of national security spending.
BAE Systems isn’t totally without risk though. With sovereign debt levels in the West rising, could governments have to cool spending on weapons? It’s possible, but it’s unlikely, in my opinion, as geopolitical instability grows. In fact, global defence spending rose at its fastest pace since the Cold War in 2025.
With strong government relationships, a diverse client base and market-leading technologies, BAE Systems looks in great shape to keep growing shareholder payouts. One final thing, its customer contracts tend to last for years, giving it excellent cash flow visibility for dividends. For this year, the forward yield is 1.8%.
Halma — 46 years of growth
Of this selection of FTSE 100 shares, Halma has the longest unbroken record of yearly dividend growth. Spirax is the only UK blue-chip stock with a better record (41 years of growth).
This is down to decades of consistent earnings progress, provided by a mix of healthy organic growth and contributions from bolt-on acquisitions. This has underpinned 22 straight years of record profit growth. That’s not all — with ultra high margins, Halma turns a huge share of these profits into cash it can then distribute to investors.
It’s also important to consider how Halma’s end markets have contributed to its resilience. The business sells safety, environmental and healthcare equipment which are often mission critical. The demand outlook for these technologies is strong, as safety and environmental regulations tighten across the globe, which bodes well for future dividends.
But remember that regulations could change later down the line, hurting sales. Halma’s forward dividend yield is 0.7%.
This story originally appeared on Motley Fool
