The last year has proven to be quite unlike any other experienced by dividend-seeking investors. As we were penning our last report in late 2019, we had little inkling of the extraordinary events to come. With the benefit of hindsight, the signs were there of the potential impact of the then-novel coronavirus in the form of an increasingly drastic public health response in China. It nonetheless took a few more months for the virus to hit Europe and the Americas and have the full effect of its impact felt on many lives and the global economy.
With a broad impact on the revenues of companies across different sectors it is unsurprising that businesses cut dividends in response. Many felt it prudent to, but some were forced to, as was the case of banks in Europe and those taking state aid around the world. Our list of companies aiming to deliver sustainable and growing dividends was not immune, with one of the ten companies cancelling its dividend. We must add a mea culpa in that this business, Bureau Veritas, was only added to the list at the last review often it is better to do nothing at all! However, as we discuss below the circumstances dictated the firm’s course of action and we believe the future to be more optimistic than the recent past. Elsewhere dividends were either maintained or increased by our selected firms, demonstrating a great deal of resilience in the face of adversity.
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