CHART: How much Australian shareholders collect each week in the incredible $24 billion 'dividend windfall'

Photo by Mark Nolan/Getty Images

Contrary to expectations the grand days of Australian company dividend payouts would soon come to an end, CommSec chief economist Craig James says that “conservatively around $24 billion (or around 1.5 per cent of GDP) will be paid out by companies over the next few months”.

“Many investors had thought that companies would – at some point – look to reduce or even stop payments of dividends to customers,” James said in a note on what he called this “dividend windfall”.

“The thinking was that the size and spread of dividend payouts was unsustainable. But that simply is not happening.”

James say that of those companies already paying dividends, “more than four out of every five companies have sought to increase or maintain dividends”.

His look at what kind of company performance has been able to drive the dividend payouts is encouraging.

“Around nine of every 10 companies in the ASX 200 recorded a profit for the year to June,” he said. “And more than 69 per cent of those reporting a profit actually lifted that profit in the year to June.

“Of the 139 companies assessed, 72 companies recorded double-digit increases in statutory full-year net profit.”

Which means we are in a period which began in late August and will run to late November where the $24 billion in dividends will be paid to investors.

Not all of the dividends will be paid in cash, some are paid through dividend reinvestment plans. But James said that even though “dividends flow at this time every year, the
dollars potentially could lift spending”.

Coming after yesterday’s second quarter GDP showed that household consumption growth was week at just 0.4% for the quarter, down from Q1’s 0.8% growth, it would be a welcome boost.

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