• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Investing

UK dividend payouts hit record high of £36.7 billion in Q2: Can it sustain?

by July 23, 2024
written by July 23, 2024

In a remarkable display of resilience, the UK stock market has delivered unprecedented dividend payouts, reaching £36.7 billion in the second quarter of this year. This 11.2% year-on-year increase underscores the market’s strength and attractiveness to income-focused investors. 

However, the question remains: Can this impressive growth be sustained?

Special dividends drive surge

The record dividend payouts were significantly influenced by one-off special dividends, as highlighted by Computershare’s quarterly dividend monitor. 

Excluding these special dividends, the underlying growth rate stands at a modest 1.0%, with regular payouts hitting a new high of £32.5 billion. 

This growth coincides with the FTSE 100 reaching new peaks, although it still trails its US and global counterparts.

Since 2016, UK equity funds have experienced outflows of nearly £55 billion as investors seek better opportunities elsewhere. 

This raises concerns about the sustainability and future performance of UK valuations in a global context.

Sector-specific drivers of dividend growth

Several factors contribute to the surge in UK dividends, including a healthier economy where wages are outpacing prices, leading to increased consumer spending and higher corporate profits. 

Mark Cleland, CEO of Issuer Services at Computershare, notes that most sectors have reported higher profits, boosting dividends and share buybacks.

Banking stocks have been particularly influential, driven by record profits in 2023 due to higher interest rates. 

For example, HSBC announced a special dividend of 16.7p per share following the sale of its Canadian arm, significantly impacting the quarter’s figures.

The healthcare sector also contributed notably, with strong performances from companies like Haleon and GlaxoSmithKline. 

Other sectors showing growth include insurance, property, industrials, and food retail, while high oil prices have supported modestly rising dividends from major oil companies.

Conversely, the housebuilding sector has struggled due to high interest rates, though optimism remains for recovery as rates decrease and government initiatives boost construction. The mining sector has also dragged on overall dividend growth, with significant year-on-year cuts.

Future outlook for UK dividends

Looking ahead, the rate of dividend growth is expected to slow, primarily due to ongoing pressures in the mining sector. Glencore’s larger-than-expected cut to its third-quarter dividend exemplifies this trend. 

Consequently, Computershare has downgraded its full-year dividend growth forecast from 1.5% to just 0.1%, projecting regular dividend payouts to total £88.2 billion for 2024.

Excluding the mining sector, the UK market could see double-digit underlying growth. Other factors, such as potential interest rate cuts, could also influence the dividend landscape. 

Lower interest rates might reduce the pressure on companies to maintain high dividend yields, allowing more resources to be directed towards growth and expansion.

Evaluating the UK market for income investors

Despite the anticipated slowdown in dividend growth, the UK market remains attractive for income-focused investors. 

The FTSE 100’s current yield of approximately 3.6% compares favorably to the S&P 500’s 1.3%, highlighting the UK market’s potential for income generation.

Several factors contribute to this disparity, including the relatively low valuation of UK stocks and their concentration in mature industries such as financials and commodities. 

In contrast, the US market’s strong tech bias often leads companies to reinvest surplus capital rather than paying out dividends.

Investors should consider overall returns, not just income potential. The S&P 500’s growth of over 16% year-to-date significantly outpaces the FTSE 100’s 5.5% increase. 

While the UK market appears undervalued, its future performance remains uncertain. A diversified investment approach across different regions may be the best strategy to balance income and growth potential.

The post UK dividend payouts hit record high of £36.7 billion in Q2: Can it sustain? appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
Status price: are spot Ethereum ETFs bullish for SNT?
next post
Chinese companies secure record $14 billion in offshore convertible bonds amid high-interest rates

related articles

Asian markets open: Nikkei, Hang Seng fall on...

June 12, 2025

Aluminum and steel tariffs spark rise in secondary...

June 12, 2025

Airbus sees aviation boom ahead, global fleet to...

June 12, 2025

US-China trade talks and Washington’s decade-long effort to...

June 12, 2025

Europe markets open: Stoxx 600 dips as UK...

June 12, 2025

UK GDP falls by 0.3% in April as...

June 12, 2025

Gordon Brothers buys Poundland; pledges £80 mn for...

June 12, 2025

Air India plane crash: London-bound flight with 242...

June 12, 2025

Air India plane crash live update: Indian President...

June 12, 2025

Copper remains supported for now even as China...

June 12, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Iran still wants a nuclear weapon despite ‘serious damage’ from US, Israeli strikes: expert warns

    July 6, 2025
  • Iran attacks US base in Qatar, Trump thanks Tehran for advance notice and ‘very weak response’

    June 23, 2025
  • Critics claim Biden remains president ‘in name only’ despite DNC vow to finish next 5 months of term strong

    August 20, 2024
  • Dogecoin and Shiba Inu: Dogecoin is firmly above EMA 200

    August 21, 2024
  • Biden says he is still considering pre-emptive pardons for Trump targets Liz Cheney, Fauci and others

    January 8, 2025

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 3

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 4

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (5,603)
  • Investing (634)
  • Stock (867)

Latest Posts

  • ‘No better dealmaker’: Trump reportedly considering executive order to ‘save’ TikTok

    January 16, 2025
  • NY appeals court denies Trump request to pause Bragg case, after judge moves sentencing until after election

    September 12, 2024
  • First Mexico-born rep targets indictment-plagued Democrat in House GOP comeback bid

    April 15, 2025

Recent Posts

  • Trump makes endorsement in ‘important’ Wisconsin Supreme Court race

    March 23, 2025
  • Republican bill would put ‘anarchist jurisdictions’ on notice, threaten federal funding

    July 21, 2025
  • RNC delegates, guests make predictions about Biden’s political future amid reports he might exit 2024 race

    July 19, 2024

Editor’s Pick

  • Elon Musk is $70 billion richer since Trump victory due to Tesla stock surge

    November 13, 2024
  • EURUSD and GBPUSD: GBPUSD rises to a new high on Friday

    August 16, 2024
  • Trump on verge of next Cabinet victory with late-night Tulsi Gabbard Senate vote

    February 11, 2025
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock