Australian companies’ dividend payouts are down 24 per cent from a year ago, as higher interest rates and cash flow challenges darken the outlook. Payouts from miners decreased significantly, although the dividend picture remains positive for banks.
Edinburgh-based Dundas Global Investors sees dividend growth, rather than dividend income itself, as the key to long-term outperformance. The numbers bear out the wisdom of that approach.
Dividend investing can be a good source of defensive income in volatile times, but changing fundamentals mean resources companies and banks may be the weaker play in 2023, with opportunities emerging beyond these traditional Australian dividend payers – although valuation will be key.
