The biggest month of dividends ever paid

Richard Coppleson

Dividends for FY16 (ie dividends paid from Nov 2015 until Oct 2016) totaled $72.7billion. But for FY17, they have increased by +7.2% to $77.9 billion. So shareholders will have received an extra $5.2 billion in cash in the last 10 months, and over the next 2. That comes despite the ASX 200 payout ratio dropping slightly from 92% last year to 91% this year, but still well above the long term average of 86%. And at $16.4 billion, this September will see the biggest single month of dividends ever paid. Here are 5 charts that look into what is driving this record payout.

This Financial Year dividends paid are $5.2 billion (7.2%) ABOVE last year

Source Coppo Report

This September will see the biggest single month of dividends ever paid: $16.4 billion

Source Coppo Report

Looking at Sept/ Oct this year (2017) vs Sept / Oct last year (2016) we see that for September this year dividends paid will be $2.54 billion more (or 18%) than last year. For October they will be $210m (or 3%) better. So combined we are going to see a whopping $2.75 billion MORE in dividends hitting shareholder accounts this Sept/Oct.

So why has this massive cash splash occurred?

Well the tables below reveal it all. Looking at the Top 20 this Sept / Oct vs last year. We can see that the Top 20 are paying $3.29 billion more than the Top 20 last year ­ an increase of 27%. So the increase we have seen in dividends paid this year was +$2.75 billion ­ so the Top 20 more than compensated for the drop off is other stocks. The table shows the movements in the best 20 biggest divides being paid this year vs what they paid last year

Source Coppo Report

In the Top 20 this year just 2 companies paid lower cash dividends.

Source Coppo Report

So ...why the massive rise??

The biggest $ increases in Dividends came from the big 4 miners BHP, Fortescue, S32 & RIO. Alone these added $2.23 billion is dividends, or 68% of the increase in the Top 20. Or of the whole increase for all dividends that are being paid this Sept / October. They have added $2.23b of the $2.75b increase on last year or as a percentage 81% of the increase.

The biggest 20 this year vs what they paid last year

Source Coppo Report

Yes the resources were up there & while we are at it, they are still BUYS (I¹ve been pushing since Sept 2016) - any dips you just need to step in (and there will be plenty of dips in them. This just reinforces that they will be sought after while the cyclical recovery is still underway& investors will buy these for income

but they are cyclical s so it won¹t last forever as we have seen before, but as I show below with BHP & RIO's dividends in the last 17 years - these big dividends could continue for the next 3 years.

Weekly breakup of dividends to be paid in September / October.

Next week we get $3 billion paid ...

Source Coppo Report

The Coppo Report

This article is an excerpt from The Coppo Report contributed to Livewire by Richard Coppleson, Director - Institutional Sales and Trading, Bell Potter. You can find out more here.

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Richard Coppleson

Richard Coppleson is a Director of Institutional Sales and Trading at Bell Potter Securities and authors “The Coppo Report”, a highly regarded market newsletter. He has over 30 years’ experience in financial markets, beginning his career at Ord...

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