GraniteShares research reveals major cuts, suspensions and cancellations of FTSE100 dividends
New analysis from ETF provider GraniteShares, which offers a range of 3x short and 3x leveraged ETPs on popular UK and US stocks, reveals that so far this year, 31 dividend payments from FTSE 100 companies have been cancelled, 12 have been suspended and nine cut.
The current FTSE 100 dividend yield is 3.63 per cent, but there are 18 FTSE 100 companies with yields of 0 per cent, and 9 with less than 1 per cent.
Will Rhind, Founder and CEO at GraniteShares, says: “The pandemic has had a devastating impact on the amount companies pay in dividends. This year alone FTSE 100 companies will pay out around GBP30 billion or one third less than was expected at the start of 2020. The forecast for FTSE 100 dividend payments for 2020 – around GBP62.3 billion – is around 17 per cent less than 2019 and would be equivalent to levels last seen in 2014.
“The outlook for dividends going forward is linked to the economic recovery both here in the UK and, for many FTSE 100 companies, globally. With rising unemployment and the potential risk of a second wave of the pandemic, the economic outlook is as uncertain as ever.”
“For sophisticated investors who use GraniteShares ETPs one interesting feature is that they incorporate the dividend multiplied by the leverage factor into the overall return, so the ETPs can be used as tool to capture dividends by those companies still paying them.”
GraniteShares offers daily ETPs providing long and short exposure to a selection of major companies listed on London Stock Exchange. The list includes companies that have cut or cancelled dividends including Glencore, Royal Dutch Shell, BP, Lloyds Bank, Barclays, and Rolls Royce.
At the beginning of July, GraniteShares also listed on London Stock Exchange long and short daily ETPs on popular US technology stocks.