What the future of dividends means for investing

SPONSORED CONTENT - Facing the new challenge for income investors.

It’s not hard to understand why so many income-oriented investors are feeling disillusioned at the moment. Big companies, from oil major Royal Dutch Shell to telecoms group BT, have been cutting dividend payouts that were once viewed – in the pre-coronavirus days – as being relatively secure. So does the current dividend crisis undermine the whole logic for investing for an income through dividends?

It’s fair to describe the Covid-19 crisis as the perfect storm for dividend-focused investors. The pandemic is hitting dividend-paying businesses from all directions. Many of the most generous dividend payers are in the banking sector and insurance. Both have been ordered by the regulators to stop dividend payouts and to strengthen their balance sheets.

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