We've become used to close-to-zero interest rates on our savings, but at least there has always been the option of dividend income as an alternative.
Spotting the reliable dividend stocks is becoming harder, however, with two big names – BHP Billiton and Standard Chartered – announcing massive cuts in their dividends today.
In the case of mining giant BHP Billiton (LON:BLT), the cut is particularly humiliating as the company has consistently maintained that it would continue to adhere to its progressive dividend policy.
Perhaps cutting the dividend is the new “progressive”?
The dividend yield for BHP Billiton had risen almost to double-digits, and the general rule of thumb is that anything yielding more than 6% is a dividend cut waiting to happen, so it is easy to deduce what the City thought about BHP's commitment to its dividend. As is usually the case, the City got it right with BHP slashing the pay-out from 62 cents to 16 – a fall of 74.2%.
Asia-focused bank Standard Chartered's (LON:STAN) dividend machete was a good deal sharper, with the full-year pay-out down by 83.3% to 13.7 cents.
Income-focused investment funds must now be getting very nervous about Royal Dutch Shell's handsome dividend of 47 cents a quarter.
Even with the value of sterling falling faster than the proverbial lead Zeppelin, that's equivalent to almost 29p, or £1.26 a year, giving a dividend yield of 7.88% based on the current share price of around £16.
On my hastily concocted “dividend cut waiting to happen” rule, either the share price of Shell has to recover quite sharply or …
Happily, InterContinental Hotels (LON:IHG) has ridden to the rescue of income funds with a a10% increase in the annual divi to 85 cents, plus a special dividend of 632.9 cents per share, costing the company a cool $1.5bn.
As Gordon Brown once demonstrated, if good news is worth releasing once, it is worth releasing again and again until the people get wise to the tactic of recycling good news.
Regency Mines (LON:RGM) is not exactly doing that, but yesterday the shares shot up when it announced it was buying back into the Horse Hill development, and today the shares have shot up again after it announced it has bought back into the onshore oil play.
Gordon Brown, of course, was part of the team that came up with the brilliant idea of rebranding Labour as New Labour, and it is true that sometimes a name change can be a good thing.
Keras Resources (LON:KRS) once used to be known as Ferrex, but with the change in focus from iron to gold, the new name makes a lot more sense.
Shares rose 10% this morning as the firm struck a 50:50 profit share agreement with Kalgoorlie Mining to exploit the Wycheproof gold deposit - a high-grade, shallow deposit on an existing mining lease with a resource of 75,600t at 2.87 g/t for 6,974 ounces.
Talking of names, Kalgoorlie and Wycheproof are a couple of corkers, aren't they?