Join our community of smart investors

Screening for dividend danger

Which income stalwarts can protect their pay outs to shareholders?
April 6, 2020

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?
Download PDF
This is Alpha subscriber only content
Start your trial to keep reading
PRINT AND DIGITAL
 +
ALPHA
Investors' Chronicle | Alpha subscription info icon
TRIAL
Get 12 weeks for £12
  • Essential access to the website and app
  • Magazine delivered every week
  • Investment ideas, tools and analysis
  • Plus Alpha research reports, stock screens,
    and deeper insights
Have an account? Sign in