Invest
Dividends take a dive for Aussie investors
Aussie investors with overexposure to the Australian market are missing out on dividend returns, according to a world leading asset company.
Dividends take a dive for Aussie investors
Aussie investors with overexposure to the Australian market are missing out on dividend returns, according to a world leading asset company.
Janus Henderson’s Global Dividend Index has revealed that Australian dividends were the weakest in the developed world in the third quarter, with payouts dropping by 2.2 per cent to US$24.5 billion.
The fall is attributed to Telstra, which paid US$700 million less year-on-year, and the big banks’ lack of growth due to the impact of the royal commission and the subsequent pressures on profits.
Insurance payouts Down Under were also flat, although the oil and mining sectors improved overall domestic performance.
BHP Billiton raised its payout by two-thirds to US$1 billion, while Rio Tinto increased by a fifth. Higher oil prices also saw Woodside Petroleum increase its per share dividend by a fifth.
The drop in payouts is a worry for SMSF members, as a new report released this week indicates many are overexposed to the Australian market. Alongside this, the third quarter is traditionally the most significant in Australia.
On an underlying basis, payouts were 9.2 per cent higher, continuing the strong growth experienced in the second quarter.
Overall, the Janus Henderson Global Index ended the quarter at a record 184.4, representing an expansion of more than four-fifths in global dividends since the index’s launch in 2009.
Globally, payouts rose by 5.1 per cent to a record US$354.2 billion in the third quarter, with the US, Canada, Taiwan and India all experiencing record quarters.
Chinese dividends also returned to growth for the first time in four years.
US payouts increased 9.1 per cent in headline terms to a record US$120 billion.
Underlying growth in the US was 7.3 per cent, corresponding with the rapid pace of the first and second quarters. Hong Kong and Taiwan delivered 5.9 per cent and 6.2 per cent, respectively, while Chinese payouts surged 14.6 per cent on an underlying basis.
Few European companies paid dividends in the third quarter, but those that did grew by a significant 11.1 per cent overall.
Janus Henderson’s forecast for headline growth continues at 8.5 per cent, taking the total dividends for the year to $1.36 trillion. On an underlying basis, this means growth throughout 2018 will be at 8.1 per cent, an upgrade from the 7.4 per cent forecast at the time of the index’s last edition.
“From a global perspective, the third quarter exceeded our expectations, but more importantly, the quality of growth was better than we expected,” said Ben Lofthouse, head of global equity at Janus Henderson.
“It came despite a negative impact from exchange rate moves and a lower level of special dividends. Importantly, our core underlying measure of growth was strong.”
He said that despite the volatility in the markets this year, steady profit growth should mean dividends continue progressing steadily.
“Expectations for corporate earnings growth in 2019 are starting to come under some pressure, given the late stage of the economic cycle,” Mr Lofthouse said.
“That is not to say that profits themselves are set to fall, however, rather that the pace of expansion may now be slower than previously thought.
“Growing profits and strong cash flow mean that dividends should continue to be well supported and so investors seeking an income from their shares should feel confident about the year ahead.”
Property
Australian home values rise at fastest rate in 17 years
Overall, Australian home values surged 2.1 per cent higher in February, the largest month-on-month change in CoreLogic’s national home value index since August 2003. ...Read more
Property
Housing finance records continue to tumble
Australian housing loan commitment has reached another record high in January, rising by 10.5 per cent in the last month alone, official figures show. ...Read more
Property
Detailed forecast: How will the capital cities perform in 2021?
With most of the property market finding its footing by the end of 2020, after the COVID-induced disruption, experts have grown optimistic about the future of real estate in a post-pandemic world. ...Read more
Property
‘Allowing super to be used for deposit will jack up house prices’
Capital city prices could soar if the backbenchers’ continued push to enable first home buyers to access their super to fund their home deposit is given the green light, a super lobby group has said...Read more
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more
Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more
Property
Australian home values rise at fastest rate in 17 years
Overall, Australian home values surged 2.1 per cent higher in February, the largest month-on-month change in CoreLogic’s national home value index since August 2003. ...Read more
Property
Housing finance records continue to tumble
Australian housing loan commitment has reached another record high in January, rising by 10.5 per cent in the last month alone, official figures show. ...Read more
Property
Detailed forecast: How will the capital cities perform in 2021?
With most of the property market finding its footing by the end of 2020, after the COVID-induced disruption, experts have grown optimistic about the future of real estate in a post-pandemic world. ...Read more
Property
‘Allowing super to be used for deposit will jack up house prices’
Capital city prices could soar if the backbenchers’ continued push to enable first home buyers to access their super to fund their home deposit is given the green light, a super lobby group has said...Read more
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more
Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
