From the AFR:
Morgan Stanley’s Christian Derold, who is an international equities portfolio manager, told a conference in Sydney on Thursday that he was doubtful the big miners had the capacity to continue with their dividend growth, saying this “isn’t sustainable I think but enjoy it while the fun lasts”.
“Their free cash flow is high at the moment because they have cut back on most expansionary capex, they’re just sitting on the maintenance capex…Instead, he was targeting companies with lower dividend yields but with greater surety around the sustainability of those yields through high gross margins and pricing power such as Nestle and Unilever.
