China's diminishing demand for commodities will impact UK dividends

clock • 2 min read

One of the great benefits of income investing is the valuation discipline it naturally incorporates into the process by looking/screening for companies that possess a high dividend yield.

Value investing has been proven to, on a long-term time horizon, generate strong returns. Despite these apparent benefits, UK income investing has been a style that has come under scrutiny as we have witnessed a sustained period of underperformance.  One potential reason for this underperformance is we have experienced a period where a number of companies have been paying out too much income and not reinvesting enough into the business to fund future growth and, in turn, dividends. This may well reverse if and when growth in capital spending kicks in.  China Special: Asia ex Japan ...

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