Providing a stabilising impact: Dividends still matter even after pandemic blues

Deep Dive into UK equities

Dividends have been in the news over the past year for all the wrong reasons. We have seen the deepest cut to UK dividends in recent memory.

According to Link Group, underlying dividends fell by 38% in 2020. This has led some commentators to question whether dividends really matter any more. Even before the pandemic, higher growth companies were outperforming, as interest rates declined. This was a tricky environment for 'value' investors, who typically focus on fundamental metrics such as dividends, but also earnings, asset values and cash flows. However, it is helpful to take a longer term view, to put the current situation in perspective. Dividends play an important role in the market. In the past four five-year peri...