Banks and miners help dividends break pre-pandemic record
Australian dividends have completed their recovery from the COVID-19 pandemic, eclipsing the previous 12-month record set in September 2019 by almost $6.7 billion, according to Janus Henderson.
The latest Janus Henderson Global Dividend Index showed Australian dividends totalled $97.9 billion in the 12 months to the end of March 2022, breaking through the pre-pandemic high by 5.3%. The firm said this was due to strong performances from Australian’s big four banks, and a significant contribution by the mining sector.
Australia’s 12-month performance was 81.7% higher than the equivalent period to the end of March 2021, dwarfing the rebound of the rest of the world (excluding Australia) at 13.6%.
Matt Gaden, head of Australia at Janus Henderson Investors, said: “Australia’s dividend recovery has powered ahead in 2022, on the back of strong commodity prices and the return to form of Australia’s big banks, no longer constrained by the dividend pause required during the worst of the pandemic.
“However, Australia’s result reflects its continued reliance on banking and mining sectors, and that level of relative sector concentration should be cause for pause among investors.”
Historically responsible for more than two fifths of Australian dividends, banking stocks recovered from the regulator-imposed dividend constraints which halted their payouts in 2020, more than doubling in the 12 months to the end of March 2022 to account for a third of the year-on-year increase in total Australian payouts.
Meanwhile, mining – traditionally responsible for a quarter of Australian payouts – compensated for its muted pandemic performance by doubling its payouts on the back of sky-high commodity prices. The increase saw mining assume responsibility for three fifths of the rebound in overall Australian dividends.
Global Q1 dividends jumped by 11% on a headline basis to a total of US$302.5 billion ($410 billion), a record for the seasonally quieter first three months of the year. Underlying growth was even stronger at 16.1%. Janus Henderson’s analysis showed that payouts had more than doubled since 2009, when the index began.
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