Dividend Aristocrats Could Be Heading For Trouble

Dividend Aristocrats Could Be Heading For Trouble

Most investors love dividends and many large-cap companies are happy to meet the income demands of investors. However, over the past 12 months it has become apparent that many large caps, whose dividends were previously thought untouchable, can’t afford to maintain the payouts.  Four examples of such companies are ConocoPhillips, BHP, Rolls Royce, and Rio Tinto all of which have slashed their dividends this year.

Are these companies’ troubles masking a more sinister underlying trend? Deutsche bank asks this key question in this week’s issue of its ‘multi-asset essay’ research note to clients a copy of which has been reviewed by ValueWalk.

Dividend aristocrats trade at premium valuaions

Deutsche argues that counter to textbook theory,...