How to locate strong and sustainable dividends

Michael Clark, portfolio manager of the Fidelity MoneyBuilder Dividend and Fidelity Enhanced Income funds, explains why he is not just attracted to the highest-yielding opportunities.

In an age of increased uncertainty and lower bond yields, investors are increasingly recognising the value of equity income investing. Investing in dividend-paying shares can either provide a high and sustainable income or be reinvested for compound growth over the long-term. However, while it is a relatively straight- forward process to screen for high-yielding stocks within an index, this ‘quantitative screen’ fails to recognise that the high yields available on certain shares can be the result of deteriorating fundamentals and falling share prices. And it also fails to give any tho...