UK managers snub blue-chip income stalwarts

Fears of a squeeze on FTSE 100 dividend payouts has prompted UK equity income managers to change tack and look lower down the cap scale for opportunities.

Twelve months on from a mid- and small-cap sell-off which saw UK equity managers back the country's largest companies as their stocks of choice, the sustainability of blue-chip payouts is being questioned Five FTSE 100 businesses - Tesco, Centrica, Severn Trent, Tullow Oil and Morrison - have already cut or cancelled dividends this year, and managers predict more to come as Q1 reports show earnings struggling to keep pace with payouts. "Having analysed 250 earnings reports this quarter, [I can see] there is a big dividend danger. Five FTSE 100 companies have already cut their dividend...