Income investors will remember 2020 as an annus horribilis and it feels like our dividend yield screens are sifting through something of a wasteland. Rather than solid income plays, the results can in many ways be thought of as screening for value investments. Hopefully some companies have the potential to re-rate as economic data improves but investors need to be vigilant for value traps.
- Some of the top-ranking companies in our FTSE All Share screen operate in industries that are vulnerable to further setbacks but could be well placed if a recovery gathers momentum. Car and bridge finance provider S&U (SUS), which tops the screen again, gave a cautiously optimistic trading update last month but until the impact of customer payment holidays ending can be understood, there is a still a dose of uncertainty.
- Other high-yielders on the list such as iron ore pellet producer Ferrexpo (FXPO), brickmaker and masonry specialist Forterra (FORT) and housebuilder Vistry Group (VTY) also face uncertainty but perhaps investors will gauge the risk-reward trade-off to be worthwhile.
