In 2018, the FTSE 100 reached its highest dividend total ever. The UK’s top companies paid out a total of £85.2bn.
And that’s just direct dividends. More cash was also returned in the form of share buybacks.
We’ve since had a few tough years though. And according to AJ Bell‘s latest Dividend Dashboard, 2022 looks set to dip a little.
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Dividend dip
It now looks like FTSE 100 dividends should reach around £76.4bn for 2022. That’s after mining dividends fell, and that sector had been a big payer in past years.
But it’s still a yield of 4.2%, with some firms on a lot more than that. So, I think it still looks like a good heap of cash for us to grab a share of.
But things are even better, with the cash set to climb again in 2023 and 2024.
Back to growth
It’s early days, but the City folk think the total for this year could reach as high as £84.8bn. That’s close to that 2018 all-time record. And it comes in a year pained by inflation, with fears of recession lurking round every corner.
And there are even signs that 2024 could see a further rise. It could push things to another new high.
So, who says UK companies are in a bad state, then? Not me, not looking at the cash they can hand out.
In fact, I think this could turn out to be one of the best years ever to buy UK shares.
Share buybacks
If dividends on their own don’t make us want to buy UK stocks, share buybacks are off to a great start in 2023.
We’ve seen £22.7bn in buybacks announced so far this year. Just take a look at the stock market news on any day, and the latest of them often make up the bulk.
On the day I’m writing this, I see buys from Aviva, Diageo, Glencore, BP, Unilever, Next, Centrica… That’s just a few of them, to show how they come from all sectors.
As well as the buybacks themselves, it tells me something else. At today’s prices, all these firms seem to rate their own shares as buys. Maybe we should too.
Big payers
There’s also a key change in the big payers. Finally, finance firms are getting back on top of the cash.
HSBC Holdings is down to pay the most cash this year. And it comes as the financial sector could make up more than half of the FTSE 100‘s profit growth in 2023.
And, in a key change, it looks like banks should pay out more than they did in 2007. So that’s more than before the big crisis. It took a while, but I knew we’d get there.
Verdict
Now, none of this is for sure. And we could see early hopes fade, as we did a bit in 2022. But it does paint a healthy picture of British business, in a year when we’re supposed to be facing all sorts of woes.
So, my take? I’ll keep buying FTSE 100 dividend shares.
