The collapse in confidence in the UK equity market has seen the dividend yields in the FTSE-100 reach unusual, perhaps even extraordinary levels.

It’s not so obvious when you look at the median figures. According to Stockopedia, the median yield in the FTSE-100 is now 4.4% (trailing) or 5.1% (forecast).

Another approach is to weight the index by market capitalisation. This helps to reflect the fact that some of the biggest companies are also the biggest dividend payers.

Take a look at the iShares FTSE 100 ETF (ISF), for example. This tracks the FTSE-100 Index, which itself is weighted by the market capitalisation of each company’s free float.

The “distribution yield” (trailing yield) on this fund was recorded as 7.7% on Thursday, March 12th. 

(For what it’s worth, the trailing P/E ratio and P/B ratio for the fund on that date were 14.4x and 1.4x, respectively. Both metrics suggest lots of “value”, if the past is some guide to the future.)

Investors are pricing in large dividend cuts, that much is clear.

And while it’s impossible to know for sure what other investors are thinking, it looks to me as if the market is pricing in an extended period of difficulty. In other words, investors are working on the basis that dividends won’t recover to their previous levels for an extended period, or financial distress at several FTSE-100 companies will completely ruin the value of their existing equity.

In this article, I’m going to look at the four FTSE-100 companies with the largest forward yields, based on the existing forecasts. I’ll try to gain an understanding of the risk level at each one and the vulnerability of its yield.

Please note that it can take time for analyst consensus forecasts to catch up with reality, so the forward yields here should be taken with a very large pinch of salt (especially in this period of uncertainty and very likely downgrades).

Evraz (EVR)

This describes itself as being among the top steel producers in the world. Operations are global but are focused on Russia.

Football fans might be interested to know that this is a key asset of Roman Abramovich, whose investment vehicle owns around 29% of the shares.

While Abramovich himself isn’t on the board of Evraz, two of his close associates are: Eugene Shvidler and…

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