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As income investors count the cost of cuts and suspensions we look ahead to those still to announce
Thursday 14 May 2020 Author: Tom Sieber

News that mobile telecoms firm Vodafone (VOD) will continue paying dividends gave income investors some cheer after a series of cuts, cancellations and deferments of dividends from UK stocks.

There are still a significant number of FTSE 100 firms which have not yet made an explicit announcement on the dividend. The table shows the highest yielding names (based on current forecasts) which fall into this category and when they are next scheduled to update the market.

This group includes some big miners as well as consumer goods giant Reckitt Benckiser (RB.), tobacco firm Imperial Brands (IMB) and energy company National Grid (NG.).

Reckitt and Imperial Brands may follow the example of their respective peers Unilever (ULVR) and British American Tobacco (BATS), which both maintained their own dividends in the face of the crisis. These decisions were underpinned by robust revenue and cash flow performance amid the pandemic.

However, the 11.7% yield at Imperial Brands suggests the market is somewhat sceptical about its ability to continue paying out large amounts of cash to shareholders.

The income available from the mining sector looks generous at face value but investors should be wary of potential dividend cuts given the volatility in commodities markets of late.

National Grid and the other utilities firms on the list should be better placed than most businesses to maintain dividends as their income is regulated and therefore relatively predictable regardless of the economic backdrop. However, business demand for energy will have been impacted by the lockdown.

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