Accoridng to new analysis from ETF provider GraniteShares, some 493 companies London Stock Exchange listed companies either cancelled, cut or suspended their dividend during the first eleven months of the year.
The company’s data suggest that 90.26% of these downgrades occurred between the start of the year and July 24th, with an additional 10.78% of downgrades coming during the subsequent four-month period.
GraniteShares noted that “no segment of the market has been immune”, with more than half of FTSE 100 equities; 46% of FTSE 250 stocks; 109 FTSE Small Cap; and 149 AIM companies announcing dividend downgrades during the year-to-date. See below the company’s full data set:
| London Stock Exchange market – Dividend companies that have cancelled, cut or suspended dividend payments | Number of companies downgrading between 1st January and 24th July 2020 | Number of companies downgrading between 1st January and 23rd November 2020 | Number of companies downgrading between 24th July and 23rd November 2020 |
| FTSE 100 | 50 | 51 | 1 |
| FTSE 250 | 108 | 115 | 7 |
| FTSE Small Cap | 89 | 109 | 20 |
| FTSE Fledgling | 14 | 21 | 7 |
| Main Market | 45 | 48 | 3 |
| AIM | 139 | 149 | 10 |
| All | 445 | 493 | 48 |
Will Rhind, Founder and CEO at GraniteShares said: “Dividends and dividend growth play a very important role helping investors achieve sustainable income and long-term returns, and they are more important than ever now that interest rates are so low.”
“The expected slowdown in GDP in the UK and in many other countries in the fourth quarter means that companies may be under additional pressure to preserve cash, which could put further pressure on dividends. It is likely that investors will face a long wait until they see dividends return to their pre-Covid levels.”
“With this in mind and against a backdrop of increased market volatility, we are seeing a significant rise in sophisticated investors and professional investors making greater use of shorting and leveraged investment strategies with a view to boosting returns. For example, the average daily volumes in these products were 123%higher in October than in September.”
UK blue chips still paying a dividend include: AstraZeneca, BAE Systems, Diageo, Unilever, Shell, BP and Vodafone.