Credit Suisse sees scope for UK mining dividend rise

Dividend yields at British mining companies have hit a five-year low just as cash flows in the sector improve, prompting some analysts to call for higher payouts as early as next year. A slump in demand in recent years, owing largely to China's economic slowdown, led to sharp drops in prices of coal and metals, leaving companies nursing heavy losses and high debt and forcing them to slash payouts and spending plans.
But now, after several quarters of furious cost-cutting, repaired balance sheets and a recovery in commodity prices, mining companies could restore or even boost dividend payouts, Credit Suisse said. Free cash flow yield, a measure of balance sheet health, is poised to rise to 7.1 percent for major miners next year. Dividend yields are forecast to almost double to 3.6 percent, according to Credit Suisse.