Which UK stocks offer the best dividend policies?

Canada Life Investments' Eugene O'Neill also explores which UK stocks are paying above index yields

In the year to 31 August, the FTSE 350 High Yield index underperformed (with dividends reinvested) the FTSE All-Share by more than 6%. The reason for this underperformance is clear. Companies in the basic materials and energy sectors constitute a whopping quarter of the index. These sectors have been plagued by a series of concerns ranging from China's weakening economic growth, to falling commodity prices and currency issues. As a sector's yield expands, so does the opportunity cost of not owning the highest-yielding stocks in the index; if they do pay their dividend, it becomes hard...