U.S. DOJ indicates it is contemplating Google break-up following monopoly ruling

Potential legal Google break-up

On Tuesday, October 8, 2024, the U.S. Department of Justice (DOJ) indicated that it might consider the break-up of Google as an antitrust action.

The DOJ is considering both behavioural and structural options to prevent Google from using products like Chrome, Play, and Android to favour Google Search.

The decision regarding the remedies is still outstanding, and it is anticipated that Google will appeal, potentially extending the process for years.

See details of recent ruling here

Dividend stocks in the FTSE 100 and FTSE 250 – a basic overview

Passive income from dividend stocks

The FTSE 100 index comprises the 100 largest companies by market capitalisation. These companies are typically well-established and financially stable, making them reliable dividend payers. 

The average dividend yield for the FTSE 100 is around 3.97%.

Here are ten dividend stocks in the FTSE 100

British American Tobacco (BATS) – Known for its high dividend yield, often exceeding 7%. Not an ethical choice.

Rio Tinto (RIO) – A mining giant with a strong dividend history.

Imperial Brands (IMB) – Another tobacco company with a robust dividend yield. Not an ethical choice.

Legal & General Group (LGEN) – A financial services company with a consistent dividend payout.

GlaxoSmithKline (GSK) – A pharmaceutical company with a reliable dividend.

Vodafone Group (VOD) – A telecommunications company with a solid dividend yield.

HSBC Holdings (HSBA) – One of the largest banking institutions with a strong dividend.

BP (BP) – An oil and gas company known for its high dividend yield.

Unilever (ULVR) – A consumer goods company with a consistent dividend payout.

National Grid (NG) – An energy company with a reliable dividend history.

FTSE 250 Dividend Stocks

The FTSE 250 index includes the next 250 largest companies after the FTSE 100. These mid-cap companies often offer higher growth potential and, in some cases, higher dividend yields. The average dividend yield for the FTSE 250 is around 3.30%.

Here are ten dividend stocks in the FTSE 250

Harbour Energy (HBR) – An oil and gas company with a yield of 7.24%.

Tritax Big Box REIT (BBOX) – A real estate investment trust with a yield of 4.76%.

Investec (INVP) – A financial services company with a yield of 6.21%.

Greencoat UK Wind (UKW) – A renewable energy company with a yield of 7.48%.

IG Group Holdings (IGG) – A financial services company with a yield of 5.02%.

ITV (ITV) – A media company with a yield of 6.43%.

Abrdn (ABDN) – An investment company with a yield of 9.45%.

HICL Infrastructure (HICL) – An infrastructure investment company with a yield of 6.37%.

Direct Line Insurance Group (DLG) – An insurance company with a yield of 3.30%.

Drax Group (DRX) – An energy company with a yield of 3.81%.

Passive dividend income

Passive income from dividends
Dividend stocks in the FTSE 100 and FTSE 250 – a basic overview

Buying dividend stocks can offer several benefits to investors – key advantages are…

Regular Income

Dividend stocks provide a steady stream of income through regular dividend payments. This can be particularly appealing for retirees or those seeking passive income.

Potential for Capital Appreciation

In addition to dividends, these stocks can also appreciate in value over time, offering the potential for capital gains. This dual benefit can enhance overall returns.

Reinvestment Opportunities

Dividends can be reinvested to purchase more shares, a strategy known as dividend reinvestment. This can compound returns over time, significantly boosting the value of your investment.

Lower Volatility

Dividend-paying stocks tend to be less volatile than non-dividend-paying stocks. Companies that pay dividends are often more established and financially stable, which can provide a cushion during market downturns.

Tax Advantages

In many jurisdictions, dividends are taxed at a lower rate than regular income. This can make dividend stocks a tax-efficient investment option.

Inflation Hedge

Dividend growth can help protect against inflation. Companies that consistently increase their dividends can provide a rising income stream that keeps pace with or exceeds inflation.

Signal of Financial Health

A company that pays regular dividends is often seen as financially healthy and confident in its future earnings. This can be a positive signal to investors about the company’s stability and profitability.

Diversification

Including dividend stocks in your portfolio can add diversification. They often belong to various sectors, providing exposure to different parts of the economy.

Compounding Effect

The combination of regular dividends and potential capital gains can create a powerful compounding effect over time, significantly enhancing long-term returns.

Psychological Benefits

Receiving regular dividends can provide psychological comfort, especially during market volatility. Knowing that you are earning income regardless of market conditions can help maintain a long-term investment perspective.

Investing in dividend stocks can be a strategic way to build wealth and generate income. However, it’s important to research and choose companies with a strong track record of dividend payments and financial stability. 

Conclusion

Investing in dividend stocks from the FTSE 100 and FTSE 250 can be a strategic way to generate passive income while also benefiting from potential capital gains. These indices offer a diverse range of companies, each with its own strengths and dividend yields, making them attractive options for income-focused investors.

These are NOT recommendations – just observations. Go do your research. Interest rates will/do change quickly – go check. Thanks.

Remember to ALWAYS do your own careful and considered research…

RESEARCH! RESEARCH! RESEARCH!

Prices listed as of 9th October 2024

The Fed says smaller rate cuts not bigger to come

Federal Reserve

Federal Reserve Chair Jerome Powell recently stated that the latest half-percent reduction in interest rates should not be interpreted as a sign that future measures will be equally as aggressive.

The Fed suggests that subsequent adjustments will likely be more ‘modest’.

In his address, the central bank’s chief highlighted their goal to balance curbing inflation with maintaining a robust labour market, basing future decisions on data insights.

‘Moving forward, should the economy evolve as widely expected, our policy stance will progressively adjust towards neutrality. Yet, we are not bound to a fixed course,‘ he clarified during in his statement. ‘Risks are two-way, and our resolutions will be determined one meeting at a time.

The Federal Reserve believe, as noted in a recent update, that they are just millimetres away from that ‘elusive’ economic soft landing.

Chinese stocks tumble amid stimulus benefit scepticism

China stocks drop

On Wednesday 9th October 2024, Chinese stocks experienced a sharp decline, with the Shanghai benchmark plummeting by 6.6%

Hong Kong’s index fell by 1.5%, in contrast to the mostly positive performance of other global markets.

Beijing’s recently detailed economic stimulus plans did not meet the high expectations set after the central bank and other agencies announced measures aimed at revitalising the struggling property sector and accelerating economic growth.

The Shanghai Composite Index fell 6.6% reversing a 4.6% gain from Tuesday 8th October 2024 when it re-opened following a weeklong national holiday.

The CSI 300 Index, which follows the top 300 stocks in the Shanghai and Shenzhen exchanges, relinquished 7.1% – ending a 10-day winning streak.

In Shenzhen’s smaller market, the benchmark tumbled by 8.7%.

The Hang Seng index in Hong Kong dropped 1.5% – and this coming after a steep decline of over 9% the previous day.

New Zealand central bank cuts rates by 0.50%

New Zealand Central Bank

New Zealand’s central bank has reduced its benchmark interest rate by 0.50% points following its monetary policy meeting, resulting in a consecutive interest rate reduction

This decrease sets the Reserve Bank of New Zealand’s interest rate at 4.75%, down from 5.25%. Economists surveyed by Reuters had anticipated this move.

Previously in August, the RBNZ made an ‘unexpected’ interest rate cut of 25 basis points. The central bank indicated that the extent of future reductions would hinge on its confidence in maintaining a low inflation environment.

In a statement, the central bank stated that it ‘assesses that annual consumer price inflation is within its 1% to 3% inflation target range and converging on the 2 percent midpoint.

New Zealand’s annual inflation rate reached 7.3% in the June quarter 2022, its highest level in over some 30 years. NZ inflation has since dropped to 3.3% as of June 2024, but still remains above the central banks medium term target range of between 1% and 3%.

Analysts are expecting a further cut in November 2024.