Dividend payout timetable for cash-hungry shareholders

After a mixed reporting season, the payments now begin for share investors, but experts say the outlook is cloudy. See the timetable.

Billions of dollars of dividends will begin flowing to Aussie shareholders this week following a mixture of positive and negative surprises in the latest reporting season.

Despite analyst forecasts of a 5 per cent rise in dividends this year compared with 2024, investors are being urged not to expect much from the nation’s historically big dividend-paying sectors, banks and resources.

CommSec estimates more than $620m will be paid to investors this week, with a total nearing $27bn to be handed over by mid-April.

CommSec chief economist Ryan Felsman said the biggest windfall for shareholders would come in the final week of March when an estimated $12.6bn would be paid out from companies including the Commonwealth Bank, BHP, Telstra, Coles Group and Fortescue.

Ten Cap founder and portfolio manager Jun Bei Liu

“I think in this environment with consumers under cost-of-living pressures despite the recent interest rate cut, companies are being more cautious,” he said.

“We have seen results that have been a little underwhelming at times – it’s been a mixed reporting season.”

Highlights had included Qantas announcing its first dividend in six years and Coles paying its highest dividend since 2019, Mr Felsman said.

However, mining stocks disappointed, particularly BHP cutting its dividend to an eight-year low, he said.

“That reflects that slowdown in Chinese demand and a weaker iron ore price.”

Ten Cap founder and portfolio manager Jun Bei Liu said overall dividends declared during the reporting season were “a little disappointing” and lower than expected, dragged down by commodity stocks.

Ms Liu said several miners struggled with poor production results, large capital expenditure requirements and high labour costs.

“BHP was tough, and even Fortescue missed dividend expectations,” she said.

“With resources it’s the pressure of labour costs – they are really high, domestic, international, everywhere.”

Ms Liu said this meant future profit increases required higher commodity prices, and the best-case scenario for resources companies would be that their dividends hold.

Banks were under strain too, she said, particularly regional banks amid pressure on their margins.

“I think banks have become more cautious heading into an election.”

No bank wanted to boast big profit growth and dividends ahead of a new federal government that could potentially hit them with fresh levies, Ms Liu said.

AMP head of investment strategy Shane Oliver said the reporting season “started off well but ended pretty ordinary, and it wasn’t just the banks and resources”.

“This was in line with soft economic conditions and has led to downgrades to earnings expectations over the last two weeks,” he said.

Dr Oliver said 54 per cent of companies had increased their dividend compared with a year ago, “which is below the norm and not much better than two years ago – suggesting that companies are cautious”.

MBA Financial Strategists director Darren James said many retirees relied on dividends as a vital part of their investment and wealth strategy.

“Retiree portfolios might look different to an accumulator, because there is that need for income … they look more to stocks that are dividend-yielding rather than growth,” Mr James said.

Share dividends also benefited from franking credits that delivered investors tax benefits, compared with interest from bank deposits that were fully taxable and would drop if the Reserve Bank continued cutting its cash rate, he said.

“If rates drop, the profit of some companies may be better because their funding costs may be reduced, which results in higher profits and greater dividends.”