Stock investors enjoy record dividend payments in third quarter, reveals data

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Investors cashed in more than £23bn in dividends during the third quarter of the year – an all-time record for the period, new data reveals.

Figures compiled by professional services firm Capita showed that dividend payments were up by more than 14.3 per cent in the three months to the end of September compared with the same period in 2017. Special dividends rose by two-fifths to £1.5bn.

Capita found that mining companies were accountable for the largest proportion of the windfall. Two thirds of all the dividends were paid by mining companies, thanks to a surge in cash flow within that sector. Overall, however, 12 of the 17 sectors measured paid higher dividends in the third quarter of 2017 than they did during the same quarter a year ago.

“We had high hopes for 2017, but the dividend seam is proving even richer than we expected,” said Justin Cooper, chief executive of shareholder solutions which is part of Capita Asset Services.

He did warn, however, that the “lustre will dim” in the fourth quarter as the “potential for further upside surprise has diminished”.

“Exchange rate gains will be gone in 2018, unless the pound takes another jolt downwards as the Brexit talks unfold, and most of the big companies who cancelled dividends in recent years have already restarted them, so that additional sparkle will have dulled. Even so, the overall value distributed by UK plc is likely to remain at or near 2017’s record levels,” he said.

The mining sector enjoyed a 262 per cent increase in dividends between the third quarter of 2016 and the same quarter of 2017. The airlines, leisure and travel sector also experienced a triple-digit surge in percentage terms. Other sectors that saw market improvements in dividend payments included industrial goods and support, consumer goods and house building, property, and building materials and construction.