Blog: Seeking refuge in high forecasted dividends – IHS Markit

Research Signals – July 2022

Since the start of the year, stocks have been challenged from
several fronts including high inflation and central bank rate
increases, alongside supply chain disruptions exacerbated by the
war in Ukraine and renewed COVID restrictions in China. Almost
every sector has sold off and, what is more, investors have not
been able to turn to other asset classes such as bonds or
cryptocurrencies to hedge their losses. So, what has been working
in 2022? In this report we highlight strong performance associated
with Leading 12 Month Total Dividend Yield from our proprietary
Dividend Forecast factor suite.

  • With dividend payments surging in the first half of the year,
    fueling our Dividend Forecasting team’s expectation for 6.5% growth
    in global aggregate dividends in 2022, retail and institutional
    investors have gravitated to high dividend paying stocks
  • The highest dividend yield firms outperformed non-dividend
    payers by significant double-digit margins across global regions
    over the past year and, in 2022, this signal surpassed other value
    indicators based on earnings estimate, particularly in Europe and
    Pacific regions
  • Firms which passed our screen for attractive forecasted
    dividend yield include US-based Devon Energy and Energy Transfer LP
    and European banks Danske Bank and Natwest Group, while Danish
    shipping company A.P. Moller Maersk and American multinational
    beverage corporation The Coca-Cola Company are examples of firms
    with significant cash flow generation and an ability to maintain
    margins in a rising cost environment

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IHS Markit provides industry-leading data, software and technology platforms and managed services to tackle some of the most difficult challenges in financial markets. We help our customers better understand complicated markets, reduce risk, operate more efficiently and comply with financial regulation.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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