Executive Summary -
Overview -
- Q2 dividends jumped 51% to £25.7bn on a headline basis, ahead of our expectations
- On an underlying basis (ie excluding special dividends), payouts rose 43.8% to £24.3bn, recovering to one sixth below the pre-pandemic Q2 2019
- Almost nine tenths of the increase in Q2 2021 came from companies that had cancelled dividends in Q2 2020
- Q2 2021 compares favourably to the Q2 2020 pandemic low point and also benefited artificially from payments returning to their normal schedule
- Despite allowing for these factors, the recovery was very strong
Sectors & Companies -
- Almost every sector saw payouts rise year-on-year
- Banks and mining companies accounted for more than two thirds of the recovery year-on-year
- Industrials saw an especially strong bounce-back, though this was influenced by timing factors
- Traditionally defensive sectors whose dividends proved resilient through the crisis showed characteristically modest growth
- Oil payouts acted as a brake on the recovery
Top 100 v mid 250 -
- The mid-250 was disproportionately hit by the pandemic and is bouncing back fastest – up 156% year-on-year in Q2
- Top 100 dividends rose 44.4%
Yield -
- 12-month prospective yield rises to 3.2%
Outlook -
- Stronger-than-expected Q2 and the removal of constraints on banking dividends mean an upgrade for 2021, more than offsetting negative second-half timing factors
- Net effect is to upgrade 2021 headline forecast by £2.5bn to £79.5bn, up 24.4% year-on-year
- Underlying dividends (ie excluding special dividends), upgraded by 3.9 percentage points or £2.7bn to £71.2bn, an increase of 13.4% year-on-year
The full and comprehensive Q2 2021 Dividend Monitor report from Link Group can be downloaded in PDF form using the following link -
https://www.linkgroup.eu/media/1610/july-2021-dividend-monitor-report.pdf
Cheers,
Itsallaguess