Shareholders are forecast to lose as much as $15 billion in dividends that would have been payable over the six months starting on July 1
, as companies slash or cancel payments due to the heavy financial impact of the coronavirus pandemic.
Hugh Dive of Atlas Funds Management says the August profit reporting season is going to be a tough one, but will not all be bad news.Shane Oliver, chief economist at AMP Capital, believes cuts and cancellations to dividends mean total dividends for the current half year will be about 30 per cent lower than the previous half year.
However, NAB has slashed its first half-dividend in response to the pandemic and Westpac and ANZ have deferred their dividend payments. "The banks have long been a hunting ground for yield seekers but the sector is unlikely to see a return to 5 per cent to 6 per cent [cash] yields and 70 per cent payout ratios until the 2022 financial year," O'Neill says.There remain some companies and sectors that are generating higher revenue and, even if they do not increase dividends, they should at least be able to maintain them, he says.
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