Look beyond the yardstick

When there are significant changes in dividend trends, it is important to understand the practices FTSE applies to determine the annual dividend of a share following a declared interim dividend

The FTSE All Share dividend yield is widely used to compare the average UK equity income return with, for example, other regional equity yields or the interest available on cash accounts and bonds. It is also used to highlight above-average dividend paying stocks, and it is particularly important for the UK Equity Income sector owing to the requirement of that sector to provide a yield at least 10% greater than that of the FTSE All Share Index. The FTSE publishes the yield daily in the Financial Times. Using the published FTSE All Share dividend yield as a yardstick has not been a foolpr...