Dividends: What's Not To Love?

Owners of mining shares are enjoying super dividends. Simon Brown explains why a dividend is such an important part of investment.

- Simon Brown

I often write about dividends because I love the cash flow, but also, they’re an important part of an investment’s return. Dividends also help to show the true health of a company. Currently we’re seeing super dividends from the commodity miners with Anglo American Platinum (Amplats) and Kumba Iron Ore respectively paying 100% and 99% of their headline earnings per share (HEPS) as a dividend to shareholders.

For investors this means billions of rands that will flow into their accounts which they can either spend or deploy into the same or other investments. Those holding unit trusts or exchange-traded funds (ETFs) with these shares in the funds will also receive bumper dividend payments the next time the unit trust or ETF pays out dividends.