Threadneedle's Colwell: Equity income's gorilla problem

ON UK INCOME

Distressed valuations are harder to find but the traditional income 'gorillas' are not the only way to find solid yields, said Threadneedle's Richard Colwell (pictured).

Four years ago equity markets were fearful. Nonetheless, it was a target-rich environment with good companies offering decent yields, as well as attractive recovery plays in sectors such as insurance, media and industrials. Stocks could be found that offered a tantalising mix of yield and dividend growth, as well as the potential for earnings recovery and a re-rating of those earnings. Today the environment is different. Equity markets have re-rated and companies have grown dividends nicely. The search for yield has become a more crowded trade, with the median yield for the FTSE now o...