27% of ASX 200 shares cut dividends during earnings season. What’s next?

The majority of S&P/ASX 200 Index (ASX: XJO) shares announced dividends during the earnings season just gone by.

Yet 27.4% of ASX 200 shares cut their dividend payouts compared to the prior corresponding period.

Here’s the breakdown.

84% of ASX 200 stocks issued a dividend

According to data from CommSec, the ASX 200 shares that reported their full year or half-year results will pay out dividends of $42.3 billion.

While that’s a tidy sum, it’s still down 1.7% year on year.

And while 111, or 84%, of ASX 200 companies that reported declared a dividend, 27.4% of those cut their payouts from a year earlier, while 61% boosted their payouts. And 11.5% of the companies paid out the same amount as the prior year.

In aggregate (summing the dividends per share), dividends during this earnings season fell by 6%.

What’s next?

Addressing the payouts of ASX dividends on a quarterly basis, Jane Shoemake, client portfolio manager on the global equity income team at Janus Henderson, said:

The second quarter marks a seasonally quieter period for Australian dividends, with local payouts growing by 13.2% in US dollar terms. Our index of Australian dividends is now 14.7% above its pre-pandemic level in December 2019.

The main driver of Australia’s surging payouts continues to be the mining industry, which has benefitted from surging commodity prices.

Looking ahead, Matt Gaden, head of Australia at Janus Henderson, sounded some words of caution:

We would caution investors that local payouts are unlikely to maintain their post-COVID strength. This is particularly important given the relatively high concentration of Australian dividend payers being banks and miners, calling for greater sectoral and geographical diversification from income investors holding the stocks of only a small number Australian companies.

Indeed, BHP Group Ltd (ASX: BHP) has become a monster dividend payer among ASX 200 shares amid soaring commodity prices.

The mining giant reported its earnings results on 16 August and declared a final fully franked dividend of US$1.75 per share. That works out to US$8.9 billion, or AU$13.1 billion at current exchange rates.

The post 27% of ASX 200 shares cut dividends during earnings season. What’s next? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why are ASX 200 mining shares getting hammered on Friday?
• Is the BHP share price 7% cheaper after trading ex-dividend? 
• What’s the outlook for ASX 200 copper shares in September?
• Why is the BHP share price tumbling again on Friday?
• Another tough day on the ASX; and BHP goes ex-dividend. Scott Phillips on Nine’s Late News

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/9EneZ2I