We expect dividend growth on an underlying basis to be 6.3 per cent for the coming year.
With bond yields still low, and cash earning next to nothing, equities will still look like the best place to find income for the coming year.
Justin Cooper is chief executive, shareholder solutions, Capita Asset Services
Dividend payouts: What do they mean?
Justin Cooper, chief executive, shareholder solutions, Capita Asset Services, explains:
“Cutting the dividend is considered to be a major negative signal to investors about a company’s prospects.
“It is usually only if a company accepts that its profits will never be able to catch up again that it will resort to cutting the dividend. Instead finance directors prefer to deliver steady upward progression in the dividend.
“What’s more, dividends are a lagging indicator. They are paid out of recent profits, and so give a rear-view glimpse of corporate health. Slower growth in dividends doesn’t necessarily mean the economic outlook has deteriorated.”
