The dividend world is diverging between 'payers and slayers'

When investing for income, it is important to consider companies which can grow profits through a prolonged period of low or zero inflation, according to William Meadon, manager on the JPMorgan Claverhouse investment trust.

With UK inflation at zero, whatever nominal yield an investor can achieve is a real one of the same amount. A prospective real yield on the FTSE 350 of some 4% looks attractive in a historic context. The UK stock market is currently on track to deliver 3% to 4% dividend growth in 2016, but there will be a notable divergence between companies. We are in a world where strong companies are getting stronger and weak companies are increasingly falling by the wayside. The dividend world is also diverging between the dividend 'payers' and the dividend 'slayers'. Equities are currently highly...