What do global dividend cuts mean for income investors?

Low interest rate environment will benefit dividend income

The current recession is unusual because it is happening in almost all parts of the world at the same time, and because it’s been so sudden.

Normally, companies would flex their dividend cover target and dividends would reduce much less than profits. So far, 2020 is proving to be different. Analysts expect average earnings per share to fall by a fifth this year  as companies struggle with lockdowns, disruption to supply chains and the sharp collapse in confidence.  There are reasons we can believe dividend income will be attractive in this low interest rate environment in the long term, but only if the dividends are viewed as sustainable. For example, Asia and emerging markets have good dividend cover and are expected to take...