The figures sound exciting, but the Dividend Monitor from Capita Registrars says that special payments from Vodafone and Cairn Energy totalling £2.2bn have masked what is actually a weaker-than-expected performance. The report said underlying growth for Q1 2012 was 6.6% higher than a year ago in the first quarter. This is considerably smaller than the 12.8% increase in 2011, and falls short of Capita’s expectations for growth so far this year.
This isn’t to say performance was poor though: whilst the headline increase was much smaller than 2011, the underlying growth from the two periods was ‘very similar’. Whole-year dividends rose 19.4% to £67.8bn in 2011, an impressive rise given the uncertainty that plagued European economies when the euro looked like it might cave in at any moment. Dividends are forecast to rise 10.6% again this year, taking the 2012 total to £75.0bn.
It’s worth noting that 35% of dividends were paid by the top five listed companies: Royal Dutch Shell, Vodafone, HSBC Holdings, Glaxosmithkline and BP. Their combined payouts were £24.0bn. This doesn’t leave much for the other 245 companies in the FTSE 250 to share, but as the report points out, growth in the FTSE 250 was faster than in the FTSE 100, so that discrepancy is improving, too.
The economic storm is not over yet and undulating growth figures each month are enough to make any investor jittery. But increased dividend payouts will at least reassure investors that there are still rewards to be had in this risky game.