Christopher Johnson: Dividend investing is a great way to earn income in your portfolio, but the amount of dividend money paid to investors in Q3 has fallen year on year, according to Computershare UK Dividend Monitor report.
Total UK dividends fell to £25.6 billion in the third quarter of 2024, down 8.1% from Q3 2023.
It also found that Q3 2024 was the lowest third quarter for dividend since 2020, when many companies paused dividends during the pandemic.
The decline was mainly driven by mining companies amid a stronger pound and low one off special dividends. In some cases, share buybacks took the place of dividends themselves.
Mining company payouts in 2024 fell by almost 60% since their peak in 2022, but they still remain the third largest dividend paying sector of 2024.
The biggest driver of the 2.6 billion pound decline in mining company dividends was Glencore.
The Morningstar three star rated business is trying to save cash to fund its recent $6.9 billion acquisition of Canadian steelmaker Teck Resources.
Two star rated Anglo American and Antofagasta were also hit by lower profits from weaker commodity prices and lower their dividends, too.
Nonetheless, four star rated Rio Tinto holds the top spot as the sector’s biggest dividend pay this year, reflecting a stable revenues and lower costs as it continues to bolster profits in line with pre-pandemic levels.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
