How to find strong dividend-payers

With traditional sources of income delivering below the rate of inflation, it's no surprise investors are turning to stocks that pay generous dividends. Tim Bennett explains what to look out for.

Life is tough for income investors just now. Traditional sources of income, such as government bonds and highly rated corporate bonds, offer returns that are far below the rate of inflation. So many are turning to dividend-paying shares instead.

To keep paying out, companies need cash. The good news is that they currently have plenty of it. As Gillian Tett notes in the Financial Times, 41% of corporate treasurers reported a rise in cash holdings this year. It's the same in Europe. With fear levels still high, firms are unwilling to commit to big investment projects.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.