$22 billion in dividends to be paid out: Commsec
The All Ordinaries may have dipped perilously close to the 5000 point mark and the ASX 200 gone below it yesterday – but dividends are shaping as a bright spot for investors over the next two months.
Commsec has predicted in a report that around $22 billion worth of dividends will be paid out during the next two months, with BHP Billiton leading the way with an estimated dividend payout worth $4.6 billion until 1 December.
The report’s author, chief economist Craig James, wrote that ASX-listed companies were increasingly using dividends as more of a marketing tool than anything else.
“Companies have been facing tough competition from other companies and other asset classes to retain the affection of investors,” he wrote.
“And the lure of attractive and sustainable dividends has been important in this regard.”
Calling the previous reporting season “unremarkable”, James said companies risked “staying on the treadmill” if they focused on dividends at the expense of further expansion.
“The main criticism is that too many companies are comfortable staying on the threadmill – paying out dividends rather than expanding, investing, looking for merger or acquisition opportunities or embarking on major exercises to boost productivity or efficiency.”
His comments on mergers and acquisitions comes off the back of analysis from The Australian, leveraging data from Thomson Reuters Deals Intelligence, tipping M&A activity to rise due to ongoing weakness of the Australian dollar against the greenback.
“The strong shape of corporate Australia, growing population, proximity of Australia to the fast growing Asia region and weaker Aussie dollar won’t be lost on foreign companies looking for takeover targets,” James wrote.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.