2 no-brainer FTSE dividend shares I want to buy with £2k

2 no-brainer FTSE dividend shares I want to buy with £2k


Image source: Getty Images

I’ve bought a few high-risk, high-maintenance UK shares this year, and now I’d like to balance them with a brace of solid FTSE 100 dividend shares. The type that won’t cost me too much time or trouble. Nice and easy no-brainer buys.

I’m not looking for ultra-high yields, but a solid and sustainable rate of income that should rise over time. A bit of share price growth growth wouldn’t go amiss. I’m hoping to rustle up £2,000 to invest in January. If I do, I’ll consider splitting it between these two.

Accounting software specialist Sage Group (LSE: SGE) fits the bill nicely. I’d always seen it as a growth stock, but data from AJ Bell shows it’s an unsung dividend hero too.

Sage Group has a very wise dividend policy

Over the last decade, the board has increased the dividend at an impressive rate 5.7% a year, according to AJ Bell. Let’s see what the chart says.


Chart by TradingView

Its dividend potential is easy to overlook, given a trailing yield of just 1.56%. That’s been eroded by its impressive share price performance. Sage shares are up 9.97% over 12 months, and 78.57% over five years.

Some feared the group’s business model would be clobbered by the artificial intelligence revolution, but as we learn more about what AI can and (crucially) can’t do, it looks more likely to be boosted by it.

On 20 November, Sage reported an 11% rise in annualised recurring revenue to £2.34bn, while underlying operating profit surged 21% to £529m. Subscription renewal rates are an enviable 101%.

My big concern is that the Sage share price is expensive, with a price-to-earnings ratio of 34.47. That’s more than double the FTSE 100 average of 15.8%. Growth only has to disappoint slightly for the shares to sell off.

That’s a concern given the turbulent global economy, with small to medium-size businesses – Sage’s customers in other words – on the front line. So it’s not a 100% no-brainer but it’s jolly close.

DCC is a dividend super hero

Sales and marketing firm DCC (LSE: DCC) offers energy, healthcare and technology solutions. The trailing dividend yield is 3.6% but its history is a lot more impressive. It’s increased shareholder payouts at an average 10.8% a year for the past decade.

This is a true Dividend Aristocrat, having hiked shareholder payouts every year for three decades. Yet the shares have fallen 2.34% over the last year. It’s cheaper than Sage, with a modest P/E of just 11.98 times earnings.

DCC has been divesting lately, as it looks to simplify its operations and focus on the energy sector.
It hopes to conclude the sale of DCC Healthcare next year, and will review its options for DCC Technology thereafter.

The group raised £150m after divested its majority stake in liquid gas business Hong Kong & Macau in July. All this should help unlock embedded value, and focus attention on its successful energy sector.

The risk is that having announced it, it struggles to follow through. Even if it does, there’s a danger that its narrow focus will leave it more exposed to volatile energy prices.

No stock is a total no-brainer. But Sage and DCC are as close as they get and I’ll invest £1k in each when I get that £2k.



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