, pointing to a degree of economic strength in the first six months of the year. But the decisions boards made on dividends suggest many have a cautious outlook for earnings, as the economy slows and rising costs bite.
AMP chief economist Shane Oliver said only 43 per cent of companies to report so far had raised dividends compared with a year ago, below the longer-term average of 58 per cent, “suggesting a degree of caution.”Macquarie strategist Matthew Brooks told clients that market forecasts for both earnings and dividends over the current 2024 financial were being downgraded.
This earnings season has also sparked an unusually high number of big share price moves for companies that beat or missed market expectations, as investors grapple with economic uncertainty. CommSec chief economist Craig James said dividend decisions came down to the financial position of each company, and so far, 90 per cent of ASX 200 companies tracked by CommSec had issued dividends, a higher proportion than the long-term average. That said, 25 per cent of companies had cut their dividend, compared with the long-run average of 18.5 per cent.“There was a higher proportion of companies than normal that cut their dividend,” James said.
On CommSec’s numbers, companies that have reported full or half-year results have announced $32.3 billion in dividends to be paid this year, down from $40.4 billion last year. A key reason for this fall was the deep cuts in dividends from mining giants