At the moment, there are a number of defensive areas of the UK market that offer good opportunities to buy companies that are expected to generate sustainable dividend growth.
Sectors such as pharmaceuticals and utilities remain important areas of investment for most equity income funds, as companies within these sectors (such as AstraZeneca and Northumbrian Water) generally have solid income streams, robust business models and strong balance sheets. However, recent news BP will suspend dividend payments for the rest of 2010 (to help meet its financial commitment to clean up the Gulf of Mexico oil spill) has once again highlighted the risks of owning certain stocks that appear to offer attractively high yields. BP’s inclusion in the list of FTSE 100 non-div...
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