Dividends fell at their slowest rate since the onset of the pandemic during Q1
Investors will be expecting to receive raised dividends, in addition to share buybacks, as companies which secured their profits during the past year look set to divide it up.
Payouts have fallen at their slowest rate since the pandemic first came into effect, as the UK emerges from lockdown, hinting at a more positive outlook for shareholders, after boardrooms slashed dividends across the board last spring.
The UK’s major banks, which are set to release their quarterly results this week, are now able to pay investors aster the regulatory ban on dividends and buybacks has now come to an end
Dividends fell at their slowest rate since the onset of the pandemic during Q1, dropping by 26.7% to £12.7bn, according to research by fund managers, which raises the prospect of a return to growth, according to The Times.
Link Group, which monitors dividend payouts, has indicated that half of UK companies either increased, restarted or held their dividends steady in the first three months of 2021. This is up from one third at the end of last year.
The group now estimates that total underlying dividends – aside from one-off payments – is set to increase by 5.6% over 2021, reaching up to £66.4bn in total.
BP is set to report on Tuesday and has said it will give further information about anticipated share buybacks.
The UK’s major banks – HSBC, Lloyds Banking Group, NatWest and Barclays – are expected to al deliver dividend increases in the FTSE 100‘s top ten. All are publishing their results in the coming days while their payouts are expected to increase further into 2022.
“After the year-long pandemic winter for dividends, the buds of spring are about to burst into bloom,” Ian Stokes, Link Group’s managing director of corporate markets for Europe, the Middle East and Africa, said. “It’s hard to characterise the big drop in the first quarter as anything but bad news, but look closer and the green shoots are already sprouting.”