If you’ve ever thought about investing but haven’t taken the leap just yet, this may be your sign to do so.
Aussie companies will be paying out more than $36 billion in dividends in the coming weeks after a positive reporting season.
Since late January, listed companies have been paying out dividends to shareholders. In fact, around $4.3 billion has been paid out so far, according to CommSec.
But the distributions are going to ramp up in the coming weeks, reaching a peak in the week beginning 28 March.
CommSec said while the $36 billion number was massive, it was actually lower than the previous reporting season in August 2021, where Aussie investors took home $41 billion.
What is reporting season?
Reporting season is a period of time when the majority of publicly listed companies release their quarterly earnings reports – updating the public on their performance.
It is during this time that companies will also decide how much money they will pay their shareholders per share – this is known as a dividend.
For example, Commonwealth Bank of Australia’s (CBA) most recent dividend was $0.94 per share.
So, if you owned 100 CBA shares you would receive a dividend of $94.
Reporting season is generally one of the most anticipated times for investors and analysts alike with a slew of expectations, forecasts and results that beat or miss those expert analyses.
How did ASX companies perform this reporting season?
CommSec chief economist Craig James said Australian companies performed pretty well considering the circumstances.
“Overall, we concluded that the reporting season was encouraging. While expenses or costs were up as expected, so were revenues,” he said.
“As a result, aggregate profits and cash levels continued to rise.”
Around 88 per cent of the 138 ASX companies that reported their half-year results posted a profit – which was the most in two years.
Around 67 per cent of companies saw profits increase and cash levels lifted to record highs.
“The profit results have been recorded at a time of mixed operating conditions,” James said.
“Interest rates were at record lows and stimulus from federal, state and territory governments continued to work their way through the economy.
“But there were more lockdowns and COVID restrictions, especially in the south-east of the country.
“Supply chain issues caused production delays and higher costs and prices.”
However, James said the reopening of business and easing of restrictions gave companies the boost they needed.
“It is clear that corporate Australia faced decidedly mixed conditions in 2021, especially over the final six months of the year,” he said.
“But while companies were well placed to issue dividends, companies have displayed caution.”