UK dividend cover among lowest as global cover falls to ten-year low

Worst quarterly performance in Q3 for three years for UK dividends

Dividend cover is set to drop to 2.2x this year – its lowest level in ten years – with dividend cover in the UK the third lowest globally, according to the Henderson International Income Trust Global Dividend Cover report.

The Link Group UK Dividend Monitor also reported that while UK dividends rose 6.9% on a headline basis in the third quarter to £35.5bn, they contracted 0.2% on an underlying basis, making for the worst quarterly performance in three years. The HINT report found that global profits soared to a record £2.3trn in 2018, up 7.2% year on year, and are expected to grow again to £2.4trn this year. Dividends rose faster than profits, climbing 9.2% to a new record of just over £1trn last year, while this year dividends are set to rise again, increasing 8.7% to £1.1trn and outstripping profit gr...