Dividend and conquer

High dividend growth since financial crisis.

The last five years has seen unattainably high dividend growth and numerous special dividends which followed dividend cuts during the crisis.  We now expect dividend growth to be more in line with earnings growth.  However growth may be lower in the short term due to the adverse effect of sterling strength on dividends paid in foreign currencies by UK companies. Due to this, companies with the ability to sustainably grow their cash flows and hence dividends, even in a weak economic environment should be the focus when investing.

Emma Mogford, Newton UK Higher Income

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