Income: Operational gearing set to push dividends higher

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Operational gearing is a good thing for a company that is growing, but any setback can have a substantial negative effect on profitability. If there is no fundamental problem with the business or its markets, then a cyclical downturn in profit for a company with a relatively fixed cost base will provide a good buying opportunity.

Patience may be required, but when there is a yield in excess of 7% with a promise that the dividend should be maintained this year then the shares are doubly attra...

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