Dividends slashed as pandemic hits economy

DividendsDividend payments from FTSE 100 companies, the largest 100 companies listed on the London Stock Exchange, have seen major cuts, suspensions and cancellations as the global pandemic ravages economies.

So far this year, 31 dividend payments from FTSE 100 firms have been cancelled, 12 have been suspended and nine have been cut.

The data comes from research by ETF provider GraniteShares which also showed that, while the current FTSE 100 dividend yield is 3.63%, there are now 18 FTSE 100 companies with yields of 0%, and 9 with less than 1%.

Will Rhind, founder and chief executive of GraniteShares, said: “This year alone FTSE 100 companies will pay out around £30 billion or one third less than was expected at the start of 2020. 

“The forecast for FTSE 100 dividend payments for 2020 – around £62.3 billion – is around 17% less than 2019 and would be equivalent to levels last seen in 2014.

“The outlook for dividends going forward is linked to the economic recovery both here in the UK and, for many FTSE 100 companies, globally.   With rising unemployment and the potential risk of a second wave of the pandemic, the economic outlook is as uncertain as ever.”

© 2020 funds europe

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