UK Dividend Monitor - Q4 2020
Posted: January 22nd, 2021, 4:49 pm
Some highlights from the latest UK Dividend Monitor (Q4 2020) -
Overview -
• 2020 dividends fell 44.0% to £61.9bn on a headline basis, the lowest annual total since 2011
• Underlying dividends (which exclude special payments) fell 38.1% to £61.1bn
• A better-than-expected Q4 was boosted by suspended payouts being restored, helping 2020 beat our revised best-case forecast by a whisker
• Two thirds of companies cancelled or cut their dividends between Q2 and Q4
• Just one quarter of companies raised dividends in 2020
Where did the COVID-19 cuts fall hardest in 2020? -
• COVID-19 cuts totalled £39.5bn (excluding specials) in 2020
• The financial sector contributed two fifths of the cuts, mainly owing to PRA prohibition on banking dividends
• Oil dividend cuts accounted for another fifth
• Mining dividends contributed one tenth of the cuts, while consumer discretionary sectors saw payouts drop by three quarters
• The classically defensive sectors of healthcare, basic consumer goods, food producers and food retail saw payouts flat or only slightly down between Q2 and Q4
• Special dividends fell by nine tenths over the whole year
Outlook -
• The worst is over but the broader outlook has darkened in the last three months culminating in the renewed lockdown
• Q1 2021 will see further cuts until the anniversary of the lockdown at the end of March, but the decline will be less than in the last three quarters
• For 2021, the biggest upside will come from the banks as they partially restore payouts, with miners also giving a boost
• But it will take time for the wider market to make up for reduced oil dividends
• For 2021, we expect a best-case increase of 8.1% on an underlying basis, yielding a total £66bn; headline dividends (which include specials) would rise 10.0%
• In a worst-case scenario, payouts could fall again in 2021, dropping 0.6% to £60.7bn on an underlying basis, or £61.5bn including special dividends
• We do not expect UK dividends to regain previous highs until 2025 at the very earliest
Here's a download link for the full Dividend Monitor Q4 2020 PDF report -
https://www.linkgroup.eu/media/1489/9668_las_q4_div_monitor_report_2020_web_aw2.pdf
Cheers,
Itsallaguess
Overview -
• 2020 dividends fell 44.0% to £61.9bn on a headline basis, the lowest annual total since 2011
• Underlying dividends (which exclude special payments) fell 38.1% to £61.1bn
• A better-than-expected Q4 was boosted by suspended payouts being restored, helping 2020 beat our revised best-case forecast by a whisker
• Two thirds of companies cancelled or cut their dividends between Q2 and Q4
• Just one quarter of companies raised dividends in 2020
Where did the COVID-19 cuts fall hardest in 2020? -
• COVID-19 cuts totalled £39.5bn (excluding specials) in 2020
• The financial sector contributed two fifths of the cuts, mainly owing to PRA prohibition on banking dividends
• Oil dividend cuts accounted for another fifth
• Mining dividends contributed one tenth of the cuts, while consumer discretionary sectors saw payouts drop by three quarters
• The classically defensive sectors of healthcare, basic consumer goods, food producers and food retail saw payouts flat or only slightly down between Q2 and Q4
• Special dividends fell by nine tenths over the whole year
Outlook -
• The worst is over but the broader outlook has darkened in the last three months culminating in the renewed lockdown
• Q1 2021 will see further cuts until the anniversary of the lockdown at the end of March, but the decline will be less than in the last three quarters
• For 2021, the biggest upside will come from the banks as they partially restore payouts, with miners also giving a boost
• But it will take time for the wider market to make up for reduced oil dividends
• For 2021, we expect a best-case increase of 8.1% on an underlying basis, yielding a total £66bn; headline dividends (which include specials) would rise 10.0%
• In a worst-case scenario, payouts could fall again in 2021, dropping 0.6% to £60.7bn on an underlying basis, or £61.5bn including special dividends
• We do not expect UK dividends to regain previous highs until 2025 at the very earliest
Here's a download link for the full Dividend Monitor Q4 2020 PDF report -
https://www.linkgroup.eu/media/1489/9668_las_q4_div_monitor_report_2020_web_aw2.pdf
Cheers,
Itsallaguess