Our dividends below global par

AUSTRALIAN investors are getting less bang for their share market buck, with dividends falling and growth prospects minimal compared to global markets.

The Janus Henderson Global Dividend Index released yesterday said local returns slumped 2.2 per cent in the September quarter, driven by a $US700-million reduction in dividends from Telstra and flat payouts by the big four banks.

Telstra was punished by investors at its annual general meeting last month when more than 60 per cent voted against the communication giant’s remuneration report, claiming cuts to executive bonuses did not go far enough.

Globally, payouts rose 5.1 per cent in the third quarter to $US354.2 billion, on the back of record returns in the US, Canada, Taiwan and India.

Janus Henderson client portfolio manager Jane Shoemake said the Australian market remained appealing to income investors due to its high yields, but that it suffered from its reliance on two heavyweight sectors.

“Domestically focused investors are over-dependent on the banks and major resources companies for dividends,” Ms Shoemake said. “Australian bank yields are attractive but there is no dividend growth forecast.”

It was up to the oil and mining sector to delivered rewards with BHP Billiton increasing payouts by two-thirds to $1 billion while Rio Tinto and Woodside Petroleum increased theirs by a fifth.

Global dividends are forecast to hit US$1.359 trillion for 2018 with underlying growth upgraded to 8.1 per cent.