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Screening for dividend danger

Which income stalwarts can protect their pay outs to shareholders?
Screening for dividend danger

For the second month running, no FTSE All Share companies pass all eight of our quality high-yielder tests designed for larger companies. There is a real risk of falling into value traps just looking at dividend yield but even some of our quality tests are rendered ineffective thanks to the severity of the coronavirus crisis.

  • Sirius Real Estate (SRE), a Reit focussed on commercial property and flexible workspace in Germany, only fails our beta test but beware profits coming under pressure thanks to coronavirus lockdown.
  • Several recruiters rank highly but these should be avoided for now, as we are on the precipice of a major recession.
  • Of the very large companies that rank highly, questions to ask include whether the Bank of England’s monetary policy response to coronavirus will hurt insurer Aviva’s (AV.) product profitability and therefore its dividend policy? Will miner Rio Tinto (RIO) be able to maintain its bumper pay out? For how long can tobacco giant Imperial Brands (IMB) support a poorly covered dividend?
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