Shareholders were graced with a bumper third quarter of dividends this year, as a weakened pound and a strong showing from financial and mining firms bolstered payouts.
UK dividends climbed 4.1 per cent in the last three months, hitting an all-time third-quarter high of £32.3bn.
Underlying payouts, which exclude special dividends, reached £31.6bn, a rise of 6.9 per cent year-on-year, according to today’s UK dividend monitor from Link Asset Services.
Commodity groups such as Glencore contributed more than any other sector to the growth, while banking giants also bumped up their returns, with Barclays hiking its interim payout by 150 per cent, marking a £257m year-on-year increase.
High street woes and tough market conditions dragged down dividends in the embattled retail sector, with total dividends falling, largely led by a cut at Next. Debenhams’ dividend was also halved.
Meanwhile, payouts from general financials and insurance were “strong across the board”, with 28 out of thirty firms seeing higher payouts.
Top 100 dividends outperformed mid-caps on an underlying basis, rising 6.7 per cent amid a robust performance of a handful of stocks.
“2018 dividends may not quite breach the £100bn milestone, but it’s going to be a close-run thing. Investors are getting ready to celebrate another record-breaking year for dividends,” according to Justine Cooper, chief executive of Link Market Services.
Cooper added: “Banking dividends are moving up a gear, just as the roaring engine of mining dividends is getting set to slip back to neutral.
Commodity prices have recovered some of their poise after trade-war-induced wobbles, but the easy profit gains from higher prices have passed for now, and earnings are beginning to disappoint analysts.
The banks, by contrast, have for the most part finally slipped the noose of regulatory fines, and shucked off the burden of lengthy restructurings.”