Companies should increase dividends next year

ON UK INCOME

Lazard's Alan Clifford says dividends are currently above their historical average, and the market has further to go.

The outlook for UK equity income remains attractive. With the global reach of many FTSE All-Share companies, it is still possible to avoid the weaker sections of the UK economy. In addition, following the cost-cutting measures of 2008 and 2009, cash as a percentage of assets is at historically high levels. Therefore, with earnings rebounding, free cashflow resilient and improved liquidity, we expect companies to be in a good position to maintain or increase dividends. Since the beginning of this year, dividend growth has beaten forecasts. This has included many mid and smaller compani...