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Highlights
- Dividend shares are back in focus amid rising consumer prices.
- Unlike the US, Australia’s dividend segment is dominated by banking and mining shares.
- ASX-listed BHP Group was the world’s biggest dividend payer in 2021.
With inflation on the rise, dividend shares are back in focus among investors. But unlike the US, where tech companies play a commanding role in the dividend segment, the Australian dividend space is dominated by banking and mining firms.
The Australian tech sector has remained under pressure so far in 2022, weighed by rising consumer prices and expectations of multiple interest rate hikes.
The ASX All Technology Index (ASX:XTX) is down over 18% on a year-to-date (YTD) basis. The index has fallen over 16% since 1 July 2021, showing a level of pressure on tech shares.
How have global tech shares fared on dividend front?
According to the 33rd edition of Global Dividend Index report released by Janus Henderson Group (ASX:JHG) earlier in March, global dividends achieved a new record of US$1.47 trillion this year, with miners and banks accounting for a lion’s share of the dividend pie.
“The most rapid growth came from regions where 2020 had seen the steepest cuts such as Europe, the UK and Australia. Payouts reached new records in a number of countries including the US, Australia, China, and Sweden. Emerging market dividends soared to a new record, driven by the recovery in Brazil,” the report said.
On the other hand, the tech sector accounted for 11% of dividends with a rise of 8% (Y-o-Y). However, global tech behemoths such as Microsoft and Apple alone contributed a big chunk to dividend, making the overall figures largely skewed.
“We expect global payouts to reach a new record of $1.52 trillion in 2022, a headline increase of 3.1%, with underlying growth of 5.7%,” the report added.
ASX tech firms’ dividend payout
The report noted that out of the 15 firms in the IT sector, eight distribute dividends. Furthermore, nearly 63% of these tech firms raised their dividend on a dividend per share basis compared to a year ago. On an average, an ASX share in the tech sector has a dividend yield of 1.05%. Even though it is much lesser than what ASX-listed mining and banking companies offer.
The report revealed that BHP Group Ltd (ASX:BHP) was the world’s biggest dividend payer in 2021. Codan Ltd (ASX:CDA), with a yield of 4.06%, pays the highest dividend among these tech firms.
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