Robin Geffen: Why many UK dividend yields 'are purely an illusion'

The issue of concentration within the UK market has been well documented, with just ten stocks producing 50% of the FTSE All-Share's yield.  Liontrust's Geffen slides out of Sanlam Income Study's White List There has been less comment, however, on the fact many of these stocks have very low levels of dividend cover - on average, just 1.1x. A high dividend cover is not only a good indicator of income sustainability, but an imperative precursor to future dividend growth. Stocks with low cover, on the other hand, pose a serious risk to both income and capital.  This is why we th...