There’s no denying it: with other asset classes now offering yields not seen since the financial crisis, the pressure is on blue-chip equity dividends to deliver. Yet UK large caps can, in the main, still lay claim to at least some of the attributes that help make equities the best tool for compounding wealth over the long term. Many are offering chunky payout rates of their own, and they aren’t necessarily the dividend traps that such yields might imply.
The UK equity market may be struggling to shake off an unwanted reputation internationally, but in certain ways that’s a help not a hindrance for those seeking income. It’s left some reliable dividend payers trading on inflation-beating yields, and in many cases there isn’t excessive cause for concern, operationally speaking.
Factor in those companies that offer the potential for good dividend growth, and the attractions of the domestic market for income investors should be obvious.