Dividend boom as payouts rise to record high

Tim Wallace
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SHAREHOLDERS’ payouts increased in 2011 for the first time since 2008, Capita Registrars’ figures show today.

Dividends hit a record £67.8bn, representing a 19.4 per cent rise for the year, and a 26 per cent jump in the fourth quarter compared with the same period of 2010.

Excluding special dividends and BP’s £1.8bn increase as it restored dividends after its 2010 oil spill, underlying growth came in at 12.8 per cent.

Firms increasing dividends outnumbered those which cut payouts by a factor of four, with 373 increasing, starting or reinstating dividends compared with only 90 which cut or cancelled them.

A further rise of 11 per cent to £75bn is forecast in 2012, in part boosted by a £2bn payout from Vodafone next month, coming from its Verizon Wireless income.

Such a rise means Capita expects Vodafone to take over from Shell as the UK’s top dividend payer, contributing almost ten per cent of total payouts.

Gross yield is expected to come in at 4.4 per cent, with the FTSE 100 yielding 4.5 per cent.