{"id":19407,"date":"2019-06-20T11:09:11","date_gmt":"2019-06-20T11:09:11","guid":{"rendered":"https:\/\/smh.group\/?p=19407"},"modified":"2023-02-15T13:45:32","modified_gmt":"2023-02-15T13:45:32","slug":"dividends-wobble-with-40-cuts","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/dividends-wobble-with-40-cuts\/","title":{"rendered":"Dividends wobble with 40% cuts"},"content":{"rendered":"\n

Recent dividend\nannouncements have been an unwelcome reminder for some investors that peaks\nalso have downsides. <\/strong><\/strong><\/h3>\n\n\n\n

Dividends matter to investors in UK shares.\nThe UK stock market has historically been one of the higher yielding of the\nworld\u2019s major share markets. For example, on 24 May the average dividend yield\nin the UK, based on the FTSE All-Share Index, was 4.26% against just 1.94%\nacross the Atlantic, as measured by the \nS&P 500 Index.<\/p>\n\n\n\n

The high level of dividends has made UK\nequity income funds a popular sector, a factor helped by over ten years of\nsub-1% base rates. As many investors, both individual and institutional, rely\non dividend income, UK listed companies are extremely reluctant to cut their\ndividend payments, even when declining profits suggest they should do so. <\/p>\n\n\n\n

While the UK market as a whole has a high\ndividend yield in terms of payments made, a handful of companies dominate. The\nlatest survey from Link Asset Management (LAM) showed that in the first quarter\nof 2019 just over half of the total \u00a319.7bn dividends paid out originated from\nonly five companies. Number five in the top payers table was Vodafone, the\ntelecoms company. <\/p>\n\n\n\n

In May Vodafone\nannounced that it would be making a 40% cut in its dividend. It was followed\nlater in the month by Royal Mail also revealing a cut in its dividend of 40%.\nOn the same day as Royal Mail wielded the dividend axe, Marks and Spencer\nconfirmed the 40% reduction in its dividend it had revealed earlier this year.<\/strong> All three companies\nhave had a strong following amongst private investors thanks to their\n(previous) high dividend yield and household name recognition. The trio have\nalso each had their own structural problems, but they are not alone. For\ninstance, many experts think Centrica, the owner of British Gas, will soon be\nforced to cut its generous dividend. <\/p>\n\n\n\n

The lesson from May\u2019s dividend cuts and LAM\u2019s dividend concentration figures is that dividend data are not always what they seem. If you are looking for an income investment <\/a><\/span><\/strong>from UK (or overseas) shares, you need to understand the facts behind the numbers. Please get in touch\u00a0with one of our Chartered Financial Planners<\/a><\/span><\/strong> on 0114 266 4432<\/strong> or info@smhca.co.uk<\/span><\/strong> if you may be affected by dividend reductions.<\/p>\n\n\n\n

The value of\nyour investment can go down as well as up and you may not get back the full\namount you invested. <\/p>\n\n\n\n

Past performance\nis not a reliable indicator of future performance. <\/p>\n\n\n\n

Investing in\nshares should be regarded as a long-term investment and should fit in with your\noverall attitude to risk and financial circumstances. <\/p>\n","protected":false},"excerpt":{"rendered":"

Recent dividend announcements have been an unwelcome reminder for some investors that peaks also have downsides. <\/p>\n","protected":false},"author":4,"featured_media":16988,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[16],"tags":[207,77,97,213,214],"class_list":["post-19407","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-services","tag-dividends","tag-financial-planning","tag-investments","tag-shares","tag-stock-market"],"acf":[],"yoast_head":"\nDividends wobble with 40% cuts - SMH Group<\/title>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dividends wobble with 40% cuts - SMH Group\" \/>\n<meta property=\"og:description\" content=\"Recent dividend announcements have been an unwelcome reminder for some investors that peaks also have downsides.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/devstagesite.co.uk\/smhgroup\/dividends-wobble-with-40-cuts\/\" \/>\n<meta property=\"og:site_name\" content=\"SMH Group\" \/>\n<meta property=\"article:published_time\" content=\"2019-06-20T11:09:11+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-02-15T13:45:32+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/09\/Forensic-FI.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"585\" \/>\n\t<meta property=\"og:image:height\" content=\"250\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Brendan Hall\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Brendan Hall\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/dividends-wobble-with-40-cuts\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/dividends-wobble-with-40-cuts\/\"},\"author\":{\"name\":\"Brendan Hall\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/#\/schema\/person\/637129b7464f960037f1b676f625570e\"},\"headline\":\"Dividends wobble with 40% cuts\",\"datePublished\":\"2019-06-20T11:09:11+00:00\",\"dateModified\":\"2023-02-15T13:45:32+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/dividends-wobble-with-40-cuts\/\"},\"wordCount\":439,\"image\":{\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/dividends-wobble-with-40-cuts\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/devstagesite.co.uk\/smhgroup\/wp-content\/uploads\/2018\/09\/Forensic-FI.jpg\",\"keywords\":[\"Dividends\",\"financial planning\",\"investments\",\"shares\",\"stock market\"],\"articleSection\":[\"SMH Financial Services\"],\"inLanguage\":\"en-GB\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/devstagesite.co.uk\/smhgroup\/dividends-wobble-with-40-cuts\/\",\"url\":\"https:\/\/devstagesite.co.uk\/smhgroup\/dividends-wobble-with-40-cuts\/\",\"name\":\"Dividends wobble with 40% cuts - 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