What investors need to know about the return of dividends

Dividends plunged as Covid-19 spread, but have rebounded almost as quickly. What can investors learn?

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In investment terms, dividends payouts were among the biggest casualties of the Covid-19 pandemic. Companies slashed their payouts back to 2017 levels on a global basis, according to data from fund manager Janus Henderson, with the UK market being hit particularly hard.

And yet what could have been a nightmare for dividend-dependent investors has turned out to be far less damaging than feared. According to the fund group’s latest global dividend index, payouts will recover pre-Covid-19 highs within a year.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.