AlphaScreens: Keeping tabs on dividend safety

AlphaScreens: Keeping tabs on dividend safety

The UK’s FTSE 100 index is on an attractive trailing 12 month yield of around five per cent but none of the blue chips are passing all our dividend yield tests. Does this mean that the supposedly cheap FTSE 100 is a value trap? Our screen places great emphasis on dividend cover, earnings growth and operating cash conversion. The criteria may be strict but as global economic growth slows, investors should pay attention to these metrics when assessing income bargains.

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