Dividends in the Australian Banking Sector

Leave a comment
Australian Economy, Macro Economics

It’s very hard to talk about dividends in Australian market without talking about banks. The increase in dividend distributions over the past decade has been primarily driven by the banking sector. Australian listed companies have demonstrated immense strength in terms of dividend growth since the global financial crisis and banks have been key contributors to the hefty payments. Australia ranks amongst the top equity markets in the world that pay good dividends, and about 70 per cent of the dividend in Australia comes from the financial sector. The big 4 banks in Australia have thus been among the top dividend-payers, as seen consistently over the years. Given that dividends support the compounding of returns over time and form a major part of a portfolio return, the banking sector in Australia has been doing its bit to provide good returns to the investors.

dividends in aus.png

Dividend contribution of various sectors in past years (Source: ASX Reports)

For instance, National Australia Bank Limited (ASX: NAB), which provides financial services in Australia, New Zealand, Asia and in the United States; has an appealing yield of 6.88 per cent and the bank paid a final dividend of 99 cents (fully franked) for 2017, which was unchanged from the 2017 interim dividend and from last year’s dividend. There were fluctuations in the yield over the last ten years and the dividends per share have increased over the period, while noted to be steady over the last four years. It maintains its dividend pay-out ratio that is around 80 percent and had reported a dividend pay-out ratio of 80.8 per cent in 2016 and 79.4 per cent in 2017.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

Leave a Reply