SYDNEY, March 13 (Xinhua) -- Australian companies are set to pay out over 22 billion dollars (16.63 billion U.S. dollars) in dividends to shareholders, over the next 10 weeks.
The 22.3 billion dollar payout, which in itself constitutes roughly 1.3 percent of Australia's total GDP, will see investors from Australia and across the globe cash in on the success of local companies.
Eighty-eight percent of companies who reported during the February period will pay dividends, with 68 percent of those set to pay a higher dividend than the previous corresponding period.
Many companies however, chose to hold on to their profits, with paying down debt being the focus, especially within the resources sectors; but despite the fact that less companies paid out dividends than previous years, the amount paid out was still higher than last year's 19 billion dollars paid out.
Chief economist at CommSec, Craig James told the Australian Financial Review on Monday, those receiving the dividends are taking a more "conservative" approach.
"They are not spending the money that comes through, they are more likely to be looking at ways to pay down debt or investing further," James said.
The tilt towards austerity seems to be shared with investors and companies, according to James, with a more savvy approach being expected of executives, by those investing in Australian companies.
"It's good news for shareholders to get those dollars back, but in the longer sense they want to see value increasing over time," James said.
But Shane Oliver, chief economist at AMP Capital, deviated slightly, saying that investors expecting dividends will be good news for consumer spending data.
"A portion of the dividend payment no doubt will be saved, some of the money will no doubt be invested in the share market, but a significant proportion of it will be spent," Oliver said.
"I think there is no doubt that dividend income is something that Australians have become increasingly reliant on." Enditem
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