In the US, 42 companies in the Standard & Poor\u2019s (S&P) 500, mostly in the hotels, airlines and retail segments, suspended dividend payments from March through July.\u00b2<\/sup><\/p>\n But that was 2020, and with a new year comes new hope.<\/p>\n Already, developments are encouraging. In December, for instance, regulators allowed the UK\u2019s biggest banks to resume dividend payments.<\/p>\n Meanwhile, the rollout of effective vaccines brings the end of the pandemic ever closer. For the first time in a long time, companies are beginning to look to the future with a sense of optimism.<\/p>\n According to Mr Jon Bell of BNY Mellon Investment Management\u2019s income team, a return to business confidence could be the defining factor of 2021.<\/p>\n For management teams, it would mean enhanced visibility into the end of this recession, and could also be the catalyst for the reinstatement of both forward-earnings guidance and dividends, reversing some of the cuts seen this year.<\/p>\n \u201cIn short,\u201d says Mr Bell, \u201cit means the beginning of a return to economic normalisation.\u201d<\/p>\n He describes recent dividend trends as positive, observing, for instance, that within the Global Income portfolio, companies like Inditex and Ferguson \u2013 which had previously suspended their dividends \u2060\u2013 have announced a resumption of payments.<\/p>\n Elsewhere within the portfolio, Mr Bell notes that the latest news flow on Richemont and Informa \u2013 two strong recent performers in the portfolio \u2013 has been encouraging, with both companies expected to resume paying a premium level of income within a reasonable time frame.<\/p>\n \u201cIncome will return,\u201d he concludes.<\/p>\n \u201cHowever, not all companies will be able to restore dividends to previous levels, as the pandemic has accelerated some of the key themes that were already in place.\u201d<\/p>\n Footnotes:<\/em> Important information:<\/em> GE214726 Exp: April 13, 2021<\/p>\n Join ST’s Telegram channel here and get the latest breaking news delivered to you.<\/p>\nA difficult year for dividends. But have we turned a corner?<\/h3>\n
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\n\u00b9<\/sup>This is Money: \u2018The top dividend payers of 2020: Income from FTSE 100 firms was slashed 20%, but these 16 blue-chips are paying out\u2019, Dec 14, 2020
\n\u00b2<\/sup>The New York Times: \u2018Dividends Are Down, but They Are Vastly Better Than Expected\u2019, Nov 20, 2020<\/p>\n
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