US investors are facing the worst year for dividend cuts since 1938, Standard & Poor’s has forecast, as a growing tally of blue-chip companies across the globe slash pay-outs for investors.
Cash flow is crucial for companies now and their need to conserve cash will outweigh their desire to pay dividends.
JPMorgan took an axe to its dividend last week, while investors in US companies as diverse as Dow Chemical, Motorola and Pfizer and Europe’s insurance groups Axa and Allianz have seen their dividends shrivel.
Such cuts have undermined the rationale that high dividend yields for global benchmarks are a buy signal for equities.
The S&P’s current trailing dividend yield – the past pay-outs of companies as a percentage of market capitalisation – of 4 per cent has been well above that of the 10-year Treasury yield since last year, but already this year the S&P has slumped more than 20 per cent. Consensus estimates for the S&P 500 dividend pay-out for 2009 is 3.49 per cent.
The FTSE 100 yields 5.46 per cent, more than a percentage point higher than at the turn of the year.
However, there has been rising investor concern over whether there could be cuts from BP or Royal Dutch Shell, which comprise 20 per cent of dividends on the index.
Crew Capital Management Thoughts on Investment
Welcome to the Crew Capital Management Thoughts on Investment blog. At Crew Capital, investment education is key to how we work with our clients. We hope our conversation and analysis entice you to think further on your investment strategies and planning. For further discussion, please contact us at rjung@crewcapital.com
Thank you!
Robert F. Jung, CFA CPA*
*CPA inactve
Thank you!
Robert F. Jung, CFA CPA*
*CPA inactve
Tuesday, March 3, 2009
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Crew Capital enters into a new client relationship only after it provides and obtains certain information. In addition, Crew Capital may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. Every prospective Crew Capital client is provided with a copy of Crew Capital ’s Privacy Policy, Form ADV Part II and Form ADV Part II Schedule F. Also, the USA Patriot Act, passed in response to the events of September 11, 2001, requires certain financial service providers to request specific information from clients. Accordingly, Crew Capital acts to verify a potential client's identity and makes a risk assessment of their financial and business activities. Lastly, Crew Capital will not provide any investment advice or supervision without a fully executed Investment Advisory Agreement.
As a registered investment adviser, Crew Capital is required by rule to adopt and enforce a code of ethics that establishes the standards of conduct expected of all employees and reflects our fiduciary duties. A copy of Crew Capital’s Ethics Policy will be provided to any client or prospective client upon request.
Nothing on this web site shall be construed as advice to any particular investment need or investor. All references regarding investment or portfolio returns are based on historical data. One should not assume that this performance will continue in the future as past performance or results are not an indication of future performance or results.
Certain portions of Crew Capital’s web site (i.e. books, newsletters, articles, commentaries, etc.) may contain a discussion of, and/or provide access to, Crew Capital’s (and those of other investment and non-investment professionals) positions and/or recommendations as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or substitute for, personalized advice from Crew Capital or from any other investment professional. Crew Capital is neither an attorney nor accountant, and no portion of the web site content should be interpreted as legal, accounting or tax advice.
At certain places on this site, live "links" to other Internet addresses may be accessed. Such external Internet addresses contain information created, published, maintained, and otherwise posted by institutions or organizations independent of Crew Capital. Crew Capital does not endorse, approve, certify, or control these external Internet addresses and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, timeliness, or correct sequencing of information located at such addresses. Use of any information obtained from such addresses is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference therein to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by Crew Capital.
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