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Look beyond the UK for dividend income
Global dividend income is there for the taking, but which markets offer the best returns?
These dividends are under short-term pressure from falling resources prices, resulting in elevated payout ratios versus cashflow, but if MRB’s mildly positive longer-term pricing forecast proves to be correct then this ratio should rebalance before before dividends need to be cut.
A second wildcard is government policy toward the sector, but this remains a relatively minor risk.
‘All told, the risk-reward is broadly favourable on a multi-year basis. The same holds for Brazilian financials – yields are only moderately above the global benchmark for the sector, but secular trends remain supportive, and dividends should trend higher and support outperformance.’
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