Investors prefer dividends inbearish markets

In the 1990s investors expected 12% annual returns from their equity investments, but in the current low inflation environment they are likely to prefer the security and certainty of dividends

In October last year, Michael McClintock, Prudential's main board director, wrote to companies in which the Pru had a major stake to stress the importance of dividends. 'The investment case for dividends is a strong and well-supported one', he wrote. 'It has stood the test of time, and is likely to be increasingly appreciated'. In general, the letter stated, cutting dividends runs the significant risk of a drop in the share price. Perhaps those wise words were not at the forefront of chief executive Jonathan Bloomer's mind when he announced Prudential's final results on 25 February. The ...