Tobacco and insurance have been long-term safe havens for income investors. Two leading lights in these sectors, Imperial Brands and Legal & General, are favourites in the equity income space, but can their high payouts be sustained? One faces structural industry shifts and has cut its dividend already in favour of lowering debt and the other seems to prefer to build a more defensive balance sheet at the expense of dividend distribution. While both still offer well above market average yields, scope to expand income and stand on substantially sub-market P/E ratios, investors in both may struggle to make a total return greater than the yield alone.
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