UK dividend payments jump 14% in a year

{"text":[[{"start":5.6,"text":"Bumper payouts from banks and miners pushed UK third-quarter dividends to a seven-year high, new data shows."}],[{"start":13.196,"text":"Dividend payments increased by 14.1 per cent on a headline basis to £28.4bn, the highest third-quarter total since 2019, according to Computershare’s UK Dividend Monitor."}],[{"start":26.8,"text":"However, rising share prices have nudged the dividend yield down from 3.2 per cent a year ago to 3.1 per cent, meaning that it now trails the 10-year gilt yield of 5.4 per cent by the largest margin since 2007, before the global financial crisis."}],[{"start":43.241,"text":"“It’s a more normal relationship now, with the dividend yield below the fixed income yield,” said Mark Baker, the author of the Dividend Monitor. “Equity yields, at least in theory, grow over time. There is a growth premium baked into the fact that the dividend yield is lower.”"}],[{"start":null,"text":"

"}],[{"start":59.224,"text":"Mining companies led the way in the third quarter, with payouts jumping 89.6 per cent year-on-year, driven by rising commodity prices, particularly for copper and precious metals, although the headline figure was flattered by weak payments in the third quarter last year."}],[{"start":75.035,"text":"Rio Tinto raised its dividend by 44 per cent to £2bn, the largest payout in the quarter, while Glencore and Anglo American more than tripled their payouts and Antofagasta and Fresnillo also posted big rises."}],[{"start":88.82,"text":"Bank dividends rose by 24.5 per cent year-on-year, with Barclays almost doubling its interim dividend, Standard Chartered increasing its payout by 66 per cent and Lloyds and NatWest raising theirs by 25 to 30 per cent."}],[{"start":null,"text":""}],[{"start":101.6,"text":"These two cyclical sectors accounted for 85 per cent of dividend growth in the quarter, with Baker noting that the global “data centre build-out is a clear positive for people digging metal out of the ground” and that banks are benefiting from a combination of “higher-for-longer” interest rates and an elevated savings ratio that provides them with cheap funding."}],[{"start":122.96,"text":"Nevertheless, he noted that across all sectors the median dividend increase was 5 per cent, which is above recent norms."}],[{"start":129.024,"text":"“Finally we are starting to see some momentum coming into payouts, which we haven’t seen for some time,” said Baker, after a post-Covid rebound in 2021 and 2022 petered out in subsequent years."}],[{"start":140.707,"text":"On the downside, advertising agency WPP slashed its dividend by 69 per cent amid weak trading and a major restructuring, while packaging group Mondi cut its payout by 60 per cent on the back of rising costs and tumbling earnings."}],[{"start":154.88,"text":"The UK’s under-pressure retail sector was another area of weakness, with Pets at Home chopping its final dividend by 67.5 per cent amid tumbling profits, discounter B&M European Value Retail slicing its distribution by 37 per cent, and stationer WHSmith axing its payout entirely."}],[{"start":174.77,"text":"While Computershare forecasts that UK-wide dividend payments will rise 7.3 per cent to £92.8bn during 2026 as a whole, this would still be comfortably below the peak of £100.5bn in 2019, a decline of 31 per cent in real inflation-adjusted terms."}],[{"start":196.08,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792219481_9410.mp3"}