The Australian Dividend
This paper will discuss the outlook for the Australian equity market with regards to dividends and the subsequent impact this will have on total returns. Despite having a history of consistent dividends and high payout ratios, and the added benefit of the imputation tax system, the outlook for Australian companies looks susceptible to the market turbulence created by the COVID pandemic, with many industries facing strong headwinds. This has exposed issues in the fundamentals of the Australian market, such as a lack of diversification by industry and market cap, which may present a case for increased global diversification in your clients’ portfolios.
The value of sustainable dividendsOctober 2020
Companies that exhibit sustainably growing dividends do not seek to generate a high income stream, nor do they try to be the fastest growing businesses. Sustainable dividend growth is a total return focused equity strategy with defensive characteristics. Dividend growers tend to preserve capital relatively well in downturns and this low volatility approach can lead to considerable outperformance over a market cycle. They seek superior downside protection and an attractive risk/reward profile.