Analysis of industry data by ETF provider GraniteShares reveals that up to one in six FTSE 100 and FTSE 250 companies have annual dividend yields of 0% based on the current share price and the total dividends declared in the previous 12 months.
Dividend payments in the FTSE-100** are headed for the second best year on record with total cash payments of £81.2 billion – just short of 2018’s record £85.2 billion – but GraniteShares analysis shows nine FTSE 100, and 48 FTSE 250 firms still have annual dividend yields of zero. A further three FTSE 100 and 14 FTSE 250 have yields of less than 1%.
Dividend cuts are largely a thing of the past with just one FTSE 100 firm cutting or suspending pay-outs this year along with three in the FTSE 250, six in the FTSE SmallCap, five in the main market and seven on AIM.
This year’s total of 22 cuts, suspensions or cancellations compares to 507 in 2020 when there were 50 in the FTSE 100, 111 in the FTSE 250, 92 in the FTSE SmallCap, 21 in FTSE Fledgling, 81 in the main market and 152 in AIM.
GraniteShares says the squeeze on dividends is fuelling growth in sophisticated UK investors using leverage and short trading strategies.
Its most traded leveraged single stock ETPs this year were Tesla, both 3X long and 3X short (3LTS & 3STS), UBER and NIO
Will Rhind, Founder and CEO at GraniteShares said: “Total dividend pay-outs for the FTSE 100 are heading for a near record year but that does not tell the whole story with substantial numbers of stocks on zero yields and the recent past showing a drop average dividend returns.
“The general consensus among many market participants is that despite the stock market falls to date, earnings per share and company guidance are likely to fall short of expectations in Q3, particularly if inflation remains high and growth continues to stall. The impact to company earnings can contribute to major shifts in share prices creating opportunities for shorting.
“Many sophisticated investors looking to boost returns are using leverage and short investment strategies, which has fuelled strong growth in our single stock 3x long and 3x short ETPs.”
GraniteShares offers a total of 106 exchange traded products (ETPs) listed on national exchanges in UK, France, Italy & Germany. They consist of a suite of index ETPs tracking FAANG stocks and a suite of Short and Leveraged Single Stock Daily ETPs tracking some of the most popular companies in UK US and European markets. Other product launches last year included the world’s first leveraged single stock ETP on NIO, the electric vehicle maker and distributor.
Its FAANG, GAFAM and FATANG product suite, offers long, short and 3X leveraged ETFs on FAANG, GAFAM and FATANG indices and can be traded in a single ticker symbol via ordinary brokerage accounts. FAANG consists of Facebook, Amazon, Apple, Netflix, and Google while GAFAM includes Google, Apple, Facebook Amazon, and Microsoft and FATANG covers Facebook, Amazon, Tesla, Apple, Netflix, and Google
ETPs offer a pure way to gain exposure to top tech companies in the U.S. market. Indices are equally weighted and rebalanced quarterly.