How to find the world's best dividend shares
‘We want an income not just for today, but a growing income into the future,’ says Evenlode Global Income’s Ben Peters.
Tapping into dividends that can deliver that is something that holds the key to a good total return for investors over the long term, the fund manager says, and hunting for those dividends around the world provides a much wider choice.
Ben has been co-manager of Evenlode Income for the past five years and that UK-focussed fund has proved a hit with investors, returning 58.8 per cent over five years compared to the average UK All Companies fund’s 18.4 per cent.
A global income fund seemed the logical next step and despite a tough year Evenlode Global Income returned 1.8 per cent in 2018, compared to minus 3 per cent for its benchmark index and minus 5.9 per cent for the average fund in the sector.
So how do you find the best dividend-paying companies – and how important is income now versus the potential for growing payouts in the future?
Ben and fellow manager and analyst Chris Elliott join us on the Investing Show to outline their thoughts on hunting for solid, reliable and growing dividends and explain why consumer staples, healthcare, and the media sector can help deliver those – hence the plethora of household names in the portfolio.
Not so much of interest are firms involved in capital intensive businesses, or who can’t set their prices so easily, says Ben, and will struggle to grow their dividends.
‘We want companies that can grow, but with a limited need for lots of capital to drive that growth’, says Ben. ‘And if we can find businesses that can do that, then they invest in themselves appropriately, to develop their products, develop their services, deliver more value to their customers, which is very important, then there is some cash left over and that can come back to investors in the form of a dividend.’