Dividends don't grow on trees

When headlines like ‘Mid-tier miners join the yield play’ start hitting your inbox, it leaves little doubt as to what is driving decisions about capital allocation in corporate Australia. So long as the yield on offer in equities remains attractive relative to fixed income assets, dividend-paying stocks will remain heavily bid. However, some observations from reporting season should serve to keep investors mindful in their pursuit of dividends. Commsec's Chief Economist, Craig James, points out: "So far 101 companies of the ASX200 have reported half-year earnings: aggregate cash balances are down 11.3% and aggregate dividends are up 7.4%.” In theory ‘dividend investors’...

When headlines like ‘Mid-tier miners join the yield play’ start hitting your inbox, it leaves little doubt as to what is driving decisions about capital allocation in corporate Australia. So long as the yield on offer in equities remains attractive relative to fixed income assets, dividend-paying stocks will remain heavily bid. However, some observations from reporting season should serve to keep investors mindful in their pursuit of dividends. 

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