Dividends near peak: report

Companies have paid $54bn in dividends in FY13, nearing historical peak.

Australian companies have paid more than $54 billion in dividends in the 2013 financial year, although payout levels are approaching their historical peak, the Australian Financial Reviewreports.

With reporting season 90% compete, the newspaper said the S&P/ASX 200 dividend payout ratio is currently 70% – nearing a 72% peak during the 1992 recession.

“The payout ratio has been pretty cyclical over time and if you look at periods where it has peaked, the economy has been reasonably weak,” Goldman Sachs head of strategy and quantitative research, Matthew Ross, told the AFR Review. “We are in a period like that at the moment.

“Firms have been increasing dividends because there’s been investor demand for it and boards haven’t had the confidence to invest.”

Mr Ross said ASX 200 firms have paid out roughly $54.3 billion in the 2013 financial year, 6% more than during the previous year.

Consensus expectations are for 7.5% growth in dividends per share for the 2014 financial year, according to the Financial Review.


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