UK equities fit the bill as 2023 favours dividend-yielding stocks

Date: 19 Jan 2023

Vicente Bunn

Daniel Casali, Chief Investment Strategist at Evelyn Partners expects investors to remain defensive and seek income-yielding securities backed by reliable cashflows in 2023.

Daniel Casali, Chief Investment Strategist at Evelyn Partners expects investors to remain defensive and seek income-yielding securities backed by reliable cashflows in 2023.

Below more details:

Last year was a tumultuous one for financial markets. Both bond and equity prices fell sharply, a rare and unwelcome occurrence for multi-asset investors, as central banks moved abruptly to more aggressive monetary policy to address the highest inflation seen for 40 years. 

Given the volatility seen in financial markets, in 2023 we expect investors to remain defensive and seek income-yielding securities backed by reliable cashflows to protect against potential further falls in markets. The good news is that the sell-off has led to the widest dispersion of dividend yield in global stocks for 13 years, excluding the pandemic.

In other words, dividend yields are high and there are more companies paying attractive yields. Assuming dividends are not cut, this is a time to play the field for yield and lock in the income they provide. Our analysis finds the highest one-year forward dividend yields are in the energy sector at 4.1%. This is supported by elevated energy prices and capital expenditure discipline.

For further information please visit: www.evelyn.com

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