09 February 2010
15% cut in UK dividends
UK companies paid out just £56.9bn in dividends in 2009, 15% or a massive £10bn less than in 2008, according to our latest Dividend Monitor report which analyses thousands of dividends, using data provided by financial information specialists Exchange Data International.
In total, 202 companies cut their dividends, and more than a third of these (74) paid no dividend at all, some because they went into liquidation. 179 companies increased their payouts and 60 held them steady.
The banking sector was especially affected. Banks slashed their dividends by half, paying out £6.1bn less to shareholders in 2009 than in 2008. Fortunes diverged widely. The state owned banks paid nothing, while HSBC only cut modestly and Standard Chartered actually returned more cash to shareholders in dividends. Cyclical companies, whose earnings are hardest hit in a recession, cut what they paid to shareholders by a quarter (25%), while defensive companies who make consistently steady profits actually managed to increase dividend payments by 5%. Drug companies paid a fifth (20%) more in dividends, while tobacco producers, electricity suppliers, and food retailers all grew their payments by at least a tenth. Dividends from the high street collapsed 62%, while household goods stocks fell by almost two thirds (64%). Oil companies were in a class of their own, paying out £3bn more than 2008, an increase of 26%.
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