we need to talk about dividends really
we do the notion that receiving too much
income from companies might seem strange
in a world of ultra-low interest rates
yet for uk-listed natural resource
companies the imperative to deliver
shareholders their yield is a big
problem in general dividends come out of
a company's cash flow once the finance
director has figured out how much she
needs to spend on investment as
commodity prices of tumbled the free
cash flow available for many of these
commodity producers is now less than the
amount going out for dividends q sales
of mines and oil fields and more debt
just to pay off shareholders the miners
at least have seen the light several of
the largest such as Glencore valet and
anglo-american decided last year to cut
their payouts to preserve cash flow if
metal prices do stop falling this year a
big if these actions could well
stabilize the increasingly precarious
financial positions of the miners so
good for their long-term health and and
bad for the unblinking impassive
shareholder it just wants his money over
the past five years mining and energy
companies have provided twenty-seven
percent of total dividends for the
footsie 100 according to Henderson's
global income team and that is a lot as
a comparison the u.s. figure was a third
of that amount uk-listed miners
accounted for about nine percent of this
foot see some and and their contribution
will in fact fall in the year ahead yep
what about the silent goliaths in the
other corner who keep shaking their
heads when approached about the subject
a fifth of footsie dividends will come
from these oil and gas companies really
just Royal Dutch Shell and BP indeed
that rose a bit last year for UK
shareholders helped by the fact that the
two pay and US dollars and the dollar
went up of it in two of the last three
years both of these super majors have
had to sell assets to help pay
for dividends that can't continue
forever in the past week to us oil
companies konechno and Anadarko have
slashed their own payouts now look
dividend yields for Shell and BP are
eight percent there at historical highs
it would seem that the market does want
to talk about dividend codes