Dividends are back. Shareholder payouts were slashed or suspended at the start of the pandemic, but are being restored at impressive speed.
This is yet more good news for investors, who are already celebrating US stock markets hitting all-time highs, with the S&P 500 smashing through 4,000 for the first time in April.
The great global dividend revival isn’t as spectacular as that, as total payouts remain well below pre-pandemic levels, but the recovery has been faster than many expected and the direction of travel is clear.
Given the long-term benefits of dividends to your portfolio, it is worth paying attention.
Dividends are the regular payments companies make to reward investors for holding their stock. They are not guaranteed, but most companies look to increase theirs every year, which gives investors a rising income over time.
Not last year, though. Dividends took a sound beating at the start of the first lockdown, as companies cut their dividends to protect their balance sheets.
Globally, dividends fell by 12.2 per cent in 2020 to $1.26 trillion, with cuts and cancellations totalling $220 billion between April and December.
One in eight companies cancelled their payouts altogether, while one in five made a cut, according to the Janus Henderson Global Dividend Index.
Investors with large sums invested in banks will have suffered the most, as they accounted for a third of global dividend cuts.
Oil producers and mining companies also cut back hard. As did companies in the consumer discretionary sector, such as cars, clothing, household goods, travel and leisure. Classic defensive sectors held firm, including food retail, pharmaceuticals and personal products.
Jane Shoemake, client portfolio manager at global active asset manager Janus Henderson, says some countries were hit harder than others, underlining the importance of investors having globally balanced portfolios.
The UK and Europe accounted for more than half the total reduction in global payouts, mainly because regulators forced banks to cut dividends.
In contrast, dividends rose by 2.6 per cent in North America. US companies were able to conserve cash and protect dividends by suspending or reducing share buybacks, while regulators were more lenient with banks. China, Hong Kong, Switzerland and Canada also did well.
To build long-term wealth, you should automatically reinvest dividends back into your portfolio
Dividends may continue to slide in the first quarter of this year, but in Janus Henderson’s best case scenario, they could rise by 5 per cent across 2021.
Dividends are an attractive way of generating income in retirement, but they can also help build wealth while still working.
Tim Bennett, head of education at Killik & Co, says they provide a “short-term cash return” on your investment, but do not spend them in the early years. “To build long-term wealth, you should automatically reinvest them back into your portfolio.”
The benefits are striking. At the time of writing, the FTSE 100 trades at 6,959. Incredibly, that is only a fraction above the level it hit on December 31, 1999, more than 21 years ago, when it ended the millennium at 6,930.
The FTSE 100 has gone nowhere, yet investors have still made money. If you had invested at the very top of the index on the eve of the millennium and reinvested all your dividends, you will have made a total return of 116 per cent, according to figures from AJ Bell.
FTSE 100 companies have declared £24.8bn of dividends so far this year, with cuts of just £2.8bn, Laith Khalaf, a financial analyst at AJ Bell, says.
“Oil majors BP and Royal Dutch Shell, steel and mining company Evraz and asset manager Standard Life Aberdeen are the only ones to cut this year, but all four paid something.”
He predicts the FTSE 100 will yield 3.8 per cent this year, and suggests that dividend investors consider investing in mutual fund Man GLG UK Income.
“This targets unfashionable companies that the market has undervalued, but are paying a sustainable dividend to investors. It currently yields 4.3 per cent.”
In the US, the S&P 500 as a whole currently yields 1.45 per cent, down from a peak of 2.31 per cent last year. This is below the long-term average of 1.87 per cent.
But this does not mean US companies have started cutting dividends. Instead, it is a reflection of how fast the index has grown.
Yields are calculated by dividing the dividend per share by the share price. So, if a company pays $5 per share and its stock trades at $100, the yield is 5 per cent. If its share price doubles to $200, the yield halves to 2.5 per cent (unless the dividend is increased).
US companies are in the middle of the reporting season and so far the signs have been promising for investors, with Microsoft returning $10bn in dividends and share buybacks, up 1 per cent from a year ago. Apple has announced a 7 per cent quarterly dividend increase.
Not every top company pays dividends. So-called growth sectors, including the technology giants, focus on re-investing in the business rather than making distributions to shareholders.
Google-owner Alphabet pays no dividends, but few investors will be complaining given that its share price climbed 87 per cent in the past year. Nor does online retail giant Amazon, which is up 47 per cent in a year. Apple yields just 0.61 per cent and Microsoft 0.86 per cent.
Growth stocks like tech firms have ruled the roost lately, but the balance may now start swinging back in favour of dividend stocks.
Fawad Razaqzada, market analyst at ThinkMarkets, says tech stocks will struggle to meet investor expectations.
As yields recover, dividend-paying stocks may look more attractive
“We could even see a reversal as investors worry about rising borrowing costs, tougher regulations, higher taxes and lower earnings potential.”
Darius McDermott, managing director of FundCalibre, says as shareholder payouts are restored or increased, dividend-paying stocks may look more attractive. He suggests spreading risk with investment funds targeting different regions of the world.
For US exposure, he tips JPM US Equity Income, which yields 1.98 per cent and has delivered a total return of 90 per cent over the past five years. Top holdings include Comcast, BlackRock, Bank of America, Johnson & Johnson and Bristol Myers Squibb.
M&G North American Dividend yields just 1 per cent, but has delivered a higher total return of 132 per cent over five years.
While many European companies cut their dividends last year, they began from a higher starting point than the US and still yield more.
Mr McDermott suggests BlackRock Continental European Income, which yields 2.37 per cent and returned 66 per cent in total over the past five years. LF Montanaro European Income yields 2.60 per cent and returned 89 per cent.
Asia is becoming an increasingly popular destination for dividend stocks as more companies adopt a culture of making shareholder payouts, Mr McDermott says.
He tips Jupiter Asian Income, which yields 3 per cent and returned 84 per cent over five years, from companies across a host of markets in the Asia-Pacific region, including Australia, Taiwan, Singapore, China, South Korea and India. Guinness Asian Equity Income has posted similar returns.
Alternatively, ETF investors may prefer the SPDR S&P Dividend Aristocrats fund range, which targets companies with a track record of regularly increasing dividend payouts.
The SPDR S&P US Dividend Aristocrats UCITS ETF version yields 2.99 per cent, SPDR S&P UK Dividend Aristocrats 2.90 per cent, and SPDR S&P Euro Dividend Aristocrats 3.41 per cent.
SPDR S&P Pan Asia Dividend Aristocrats UCITS ETF, which covers Asia Pacific, yields 3.57 per cent.
In today’s low interest rate world, dividends are king for those seeking income.
Dubai World Cup Carnival card
6.30pm: Al Maktoum Challenge Round-2 Group 1 (PA) US$75,000 (Dirt) 1,900m
7.05pm: Al Rashidiya Group 2 (TB) $250,000 (Turf) 1,800m
7.40pm: Meydan Cup Listed Handicap (TB) $175,000 (T) 2,810m
8.15pm: Handicap (TB) $175,000 (D) 1,600m
8.50pm: Handicap (TB) $135,000 (T) 1,600m
9.25pm: Al Shindagha Sprint Group 3 (TB) $200,000 (D) 1,200m
10pm: Handicap (TB) $135,000 (T) 2,000m
The National selections:
6.30pm - Ziyadd; 7.05pm - Barney Roy; 7.40pm - Dee Ex Bee; 8.15pm - Dubai Legacy; 8.50pm - Good Fortune; 9.25pm - Drafted; 10pm - Simsir
Mercedes-AMG GT 63 S E Performance: the specs
Engine: 4.0-litre twin-turbo V8 plus rear-mounted electric motor
Power: 843hp at N/A rpm
Torque: 1470Nm N/A rpm
Transmission: 9-speed auto
Fuel consumption: 8.6L/100km
On sale: October to December
Price: From Dh875,000 (estimate)
The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
Killing of Qassem Suleimani
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The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Zayed Sustainability Prize
TYPES%20OF%20ONLINE%20GIG%20WORK
%3Cp%3E%3Cstrong%3EDesign%2C%20multimedia%20and%20creative%20work%3A%20%3C%2Fstrong%3ELogo%20design%2C%20website%20design%2C%20visualisations%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBusiness%20and%20professional%20management%3A%20%3C%2Fstrong%3ELegal%20or%20management%20consulting%2C%20architecture%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBusiness%20and%20professional%20support%3A%20%3C%2Fstrong%3EResearch%20support%2C%20proofreading%2C%20bookkeeping%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ESales%20and%20marketing%20support%3A%20%3C%2Fstrong%3ESearch%20engine%20optimisation%2C%20social%20media%20marketing%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EData%20entry%2C%20administrative%2C%20and%20clerical%3A%20%3C%2Fstrong%3EData%20entry%20tasks%2C%20virtual%20assistants%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIT%2C%20software%20development%20and%20tech%3A%20%3C%2Fstrong%3EData%20analyst%2C%20back-end%20or%20front-end%20developers%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EWriting%20and%20translation%3A%20%3C%2Fstrong%3EContent%20writing%2C%20ghost%20writing%2C%20translation%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EOnline%20microtasks%3A%20%3C%2Fstrong%3EImage%20tagging%2C%20surveys%3C%2Fp%3E%0A%3Cp%3E%3Cem%3ESource%3A%20World%20Bank%3C%2Fem%3E%3C%2Fp%3E%0A
Killing of Qassem Suleimani
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SERIE A FIXTURES
Saturday (UAE kick-off times)
Atalanta v Juventus (6pm)
AC Milan v Napoli (9pm)
Torino v Inter Milan (11.45pm)
Sunday
Bologna v Parma (3.30pm)
Sassuolo v Lazio (6pm)
Roma v Brescia (6pm)
Verona v Fiorentina (6pm)
Sampdoria v Udinese (9pm)
Lecce v Cagliari (11.45pm)
Monday
SPAL v Genoa (11.45pm)
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The years Ramadan fell in May
MATCH INFO
Championship play-offs, second legs:
Aston Villa 0
Middlesbrough 0
(Aston Villa advance 1-0 on aggregate)
Fulham 2
Sessegnon (47'), Odoi (66')
Derby County 0
(Fulham advance 2-1 on aggregate)
Final
Saturday, May 26, Wembley. Kick off 8pm (UAE)
The biog
Age: 32
Qualifications: Diploma in engineering from TSI Technical Institute, bachelor’s degree in accounting from Dubai’s Al Ghurair University, master’s degree in human resources from Abu Dhabi University, currently third years PHD in strategy of human resources.
Favourite mountain range: The Himalayas
Favourite experience: Two months trekking in Alaska
UAE currency: the story behind the money in your pockets
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EGYPT SQUAD
Goalkeepers: Ahmed El Shennawy, Mohamed El Shennawy, Mohamed Abou-Gabal, Mahmoud Abdel Rehem "Genesh"
Defenders: Ahmed Elmohamady, Ahmed Hegazi, Omar Gaber, Ali Gazal, Ayman Ahsraf, Mahmoud Hamdy, Baher Elmohamady, Ahmed Ayman Mansour, Mahmoud Alaa, Ahmed Abou-Elfotouh
Midfielders: Walid Soliman, Abdallah El Said, Mohamed Elneny, Tarek Hamed, Mahmoud “Trezeguet” Hassan, Amr Warda, Nabil Emad
Forwards: Ahmed Ali, Mohamed Salah, Marwan Mohsen, Ahmed "Kouka" Hassan.
UAE currency: the story behind the money in your pockets
PROFILE OF STARZPLAY
Date started: 2014
Founders: Maaz Sheikh, Danny Bates
Based: Dubai, UAE
Sector: Entertainment/Streaming Video On Demand
Number of employees: 125
Investors/Investment amount: $125 million. Major investors include Starz/Lionsgate, State Street, SEQ and Delta Partners
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
PROFILE OF CURE.FIT
Started: July 2016
Founders: Mukesh Bansal and Ankit Nagori
Based: Bangalore, India
Sector: Health & wellness
Size: 500 employees
Investment: $250 million
Investors: Accel, Oaktree Capital (US); Chiratae Ventures, Epiq Capital, Innoven Capital, Kalaari Capital, Kotak Mahindra Bank, Piramal Group’s Anand Piramal, Pratithi Investment Trust, Ratan Tata (India); and Unilever Ventures (Unilever’s global venture capital arm)
Mica
Director: Ismael Ferroukhi
Stars: Zakaria Inan, Sabrina Ouazani
3 stars
Results
6pm: Dubai Trophy – Conditions (TB) $100,000 (Turf) 1,200m
Winner: Silent Speech, William Buick (jockey), Charlie Appleby
(trainer)
6.35pm: Jumeirah Derby Trial – Conditions (TB) $60,000 (T)
1,800m
Winner: Island Falcon, Frankie Dettori, Saeed bin Suroor
7.10pm: UAE 2000 Guineas Trial – Conditions (TB) $60,000 (Dirt)
1,400m
Winner: Rawy, Mickael Barzalona, Salem bin Ghadayer
7.45pm: Al Rashidiya – Group 2 (TB) $180,000 (T) 1,800m
Winner: Desert Fire, Hector Crouch, Saeed bin Suroor
8.20pm: Al Fahidi Fort – Group 2 (TB) $180,000 (T) 1,400m
Winner: Naval Crown, William Buick, Charlie Appleby
8.55pm: Dubawi Stakes – Group 3 (TB) $150,000 (D) 1,200m
Winner: Al Tariq, Pat Dobbs, Doug Watsons
9.30pm: Aliyah – Rated Conditions (TB) $80,000 (D) 2,000m
Winner: Dubai Icon, Patrick Cosgrave, Saeed bin Suroor
Mohammed bin Zayed Majlis
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
The specs: 2017 Dodge Viper SRT
Price, base / as tested Dh460,000
Engine 8.4L V10
Transmission Six-speed manual
Power 645hp @ 6,200rpm
Torque 813Nm @ 5,000rpm
Fuel economy, combined 16.8L / 100km
Last five meetings
2013: South Korea 0-2 Brazil
2002: South Korea 2-3 Brazil
1999: South Korea 1-0 Brazil
1997: South Korea 1-2 Brazil
1995: South Korea 0-1 Brazil
Note: All friendlies
Mohammed bin Zayed Majlis
UAE currency: the story behind the money in your pockets
A new relationship with the old country
Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
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Graduated from the American University of Sharjah
She is the eldest of three brothers and two sisters
Has helped solve 15 cases of electric shocks
Enjoys travelling, reading and horse riding
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Mohammed bin Zayed Majlis
THREE
%3Cp%3EDirector%3A%20Nayla%20Al%20Khaja%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Jefferson%20Hall%2C%20Faten%20Ahmed%2C%20Noura%20Alabed%2C%20Saud%20Alzarooni%3C%2Fp%3E%0A%3Cp%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
Zayed Sustainability Prize
Global state-owned investor ranking by size
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Sri Lanka-India Test series schedule
- 1st Test India won by 304 runs at Galle
- 2nd Test Thursday-Monday at Colombo
- 3rd Test August 12-16 at Pallekele
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%204-cyl%20turbo%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E190hp%20at%205%2C600rpm%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E320Nm%20at%201%2C500-4%2C000rpm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E7-speed%20dual-clutch%20auto%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E10.9L%2F100km%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh119%2C900%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%3C%2Fp%3E%0A
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