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Australian companies lead global dividend payout growth

By Mensholong Lepcha

08:12, 15 November 2021

Aerial view of the Sydney central business district
An aerial view of the Sydney CBD – Photo: Shutterstock

Australian companies posted world-leading dividend payout growth in 2021 after seeing some of its worst-hit sectors, including mining and financials, recover from a challenging 2020.

Year-to-date dividends distributed by Australian firms grew four times faster than the rest of the world while hitting record payouts in the third quarter, said asset management firm Janus Henderson in a report.

Miners and bankers have emerged as the biggest drivers of dividend growth in Australia on the back of booming commodities prices, lower-than-expected loan provisions and a low base from last year.

Mining boom

A surge in commodity prices have helped mining heavyweights like BHP Group and Rio Tinto to post healthy earnings in 2021 allowing them to distribute record dividend payouts.

Global miner BHP Group distributed a whopping A$25.6bn ($18.82bn) to become the world’s biggest dividend payer in 2021 from combined payouts of its UK and Australian divisions, according to Janus Henderson. 

“Soaring commodity prices resulted in record profits for many companies and more than 60% of Australia’s Q3 [third quarter] payouts were contributed by miners, tripling their year-on-year dividends,” said Janus Henderson.

Banks resume dividends

The banking sector was another significant contributor to an all-time high dividend payout in Australia during the third quarter of 2021.


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+0.100% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 22:00 (UTC)
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Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
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-0.530% 1D Chg, %
Long position overnight fee -0.0200%
Short position overnight fee 0.0118%
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Release of provisions following lower-than-expected loan impairments and removal of dividend limits helped Australia’s “Big Four” banks resume dividend payouts.

“Dividends are recovering more quickly than expected, driven by improving corporate balance sheets, and increased optimism about the future,” said Ben Lofthouse, head of global equity income at Janus Henderson. 

Global dividend payout at record high

Janus Henderson has forecasted dividend growth in Australia to reach around 60% in 2021.

“These results will come as welcome news to Australian investors, particularly self-funded retirees,” said Matt Gaden, head of Australia at Janus Henderson.

“Janus Henderson now expects global growth of 15.6% on a headline basis in USD terms, taking 2021 payouts to a new record of A$1.93 trillion,” said the report.

Read more: Iron ore prices buckle on subdued Chinese demand

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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