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Fool's gold and golden nuggets

How to analyse and monitor UK dividends
Fool's gold and golden nuggets
  • The latest Link Quarterly Dividend Monitor suggests that the aggregated distribution from the FTSE 350 is back to circa 85 per cent of pre-Covid levels
  • Understanding how dividends are paid is important when investors are assessing yield

The Link Quarterly Dividend Monitor reports that dividends are rebounding. Payments from mid-cap stocks were more than 150 per cent above Q2 2020 and for the top 100 companies, 44 per cent. The aggregated distribution from the FTSE 350 is back to circa 85 per cent of pre-Covid levels (Q2 2019). 

These figures, unfortunately, do not paint an especially useful picture as the increase is a mash of true progressive rises, restarts from enforced cuts, recommenced payments from businesses opportunistically conserving cash and some catch-ups of skipped payments. Overall, two-thirds of businesses reduced their payment last year, plus one in 10 cancelled and it was those restarting cancelled dividends that drove around 90 per cent of the rebound. So the market’s underlying rate of dividend growth is indiscernible at this stage.

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