Commonwealth Bank research on the flow of dividends from ASX listed companies in the past 18 months has nicely captured the dent caused by Covid over that period.
Dividend payouts have yet to regain the $27.5 billion paid out in the February reporting season (mostly for the six months to December 31 – either interim or finals from the likes of Rio Tinto).
And while there’s been an obvious improvement, the research confirms companies remain cautious with a 50% jump in cash on hand in the 2021 reporting period
The research from CommSec shows almost $26 million of dividends were declared and are being paid for in the December 31, 2020 half.
That’s up nearly 25% from the Covid-hit $21.6 million paid out in the August reporting season for companies mostly balancing at June 30 last year.
The February 2020 period saw many companies cut dividends, delay them or suspend them – the banks were told by APRA to cut dividends or suspend them (as Westpac did). Qantas, delayed, then dropped its dividends.
The February 2021 period saw a boost from the CBA with a rise in its interim (to $1.50 a share, still short of the $2 a share paid in February 2020), as the banks returned to paying dividends and increasing them in some cases.
There were also record payouts from giant miners like BHP and Fortescue (record interims) and Rio Tinto (a record final) and OZ Minerals (also a record final).
CommSec said the improved dividends in the February 2021 reporting period came after 86% of ASX 200 companies reported statutory profits for the six months to December 2020.
“Of the companies to report a profit for the half-year to December, 60 per cent managed to lift earnings while 40 per cent recorded a fall in earnings,” CommSec said.
Total cash at hand was up over 50% on a year ago, rising from $82 billion in February 2020 to $124 billion this, “as companies still remain wary about paying out most of their statutory earnings,” according to CommSec.
CommSec Chief Economist Craig James said in a statement: “While more companies are in a position to issue, or even increase dividends, many are exercising caution. Other companies, such as those dependent on movement of people across foreign borders may not be in a position to pay dividends.”
He said dividend payments from the interim reporting season are expected to be completed by early May with some companies starting distributions in February. Most will pay their investors throughout the five-week period that began Monday, 15 March.
The largest week for dividend payments will be the week ending March 26, with around $12 billion to be paid out to shareholders.
