Payouts to investors will ramp up in the coming week with companies keen on maintaining dividend payments despite weaker profits.
Boards are taking a cautious stance on lifting dividends as businesses face rising costs and an economy that is slowing because of steep interest rate rises.
The Albanese government’s proposed change on franking credits,if it becomes law,will raise only $10 million a year. This leads to the question;why bother?
Consumer spending,demand uncertainty for miners and labour challenges are front and centre as the earnings season ramps up next week.
While much of the focus is on a looming increase in mortgage costs,higher interest rates are expected to significantly benefit bank shareholders.
The power of dividends is under-appreciated by those mostly younger investors who have piled into tech stocks that are unprofitable,focussing on share price gains alone.
Australia’s mergers and acquisitions boom is set to roll on as major corporates deal with massive cash piles that have swollen further while they generated strong-than-expected profits in the first half of this year.
After two decades,BHP’s experiment with a complicated corporate structure is about to end,injecting more volatility and some extra risk into the Australian sharemarket.
The outlook for Australian dividends in fiscal 2022 is still pretty upbeat,but market volatility and weaker iron ore prices are likely to make companies less generous with payouts.
Recent profit results showed the country’s major lenders are sitting on piles of surplus capital and excess provisions for bad debts. That bodes well for rising dividends.
Ongoing COVID lockdowns are not expected to stop companies opening the purse strings to pursue acquisitions or return cash to investors via buybacks and dividends.