Where to allocate for dividends: Ausbil

dividend Ausbil

14 September 2022
| By Laura Dew |
image
image
expand image

The dividend outlook for Australian equities in FY23 is looking more challenged than before, according to Ausbil.

Dividends income had regained their losses since the COVID-19 pandemic but earnings growth was expected to be varied going forward as sectors adjusted to higher interest rates and stockmarket falls across developed markets.

The ASX 200 had lost 7.7% since the start of the year to 13 September while the S&P 500 had lost 14.3% over the same period.

It was therefore important to be invested in sectors that were less exposed to a potential slowdown and able to maintain their profit margins. This included companies in defensive sectors such as consumer staples, energy and quality growth businesses which were unaffected by the business cycle.

Michael Price, portfolio manager of the Ausbil Active Dividend Income fund, said: “We expect quite low growth in dividends [from the current high level] overall in FY23. Industrial companies and financial companies with pricing power and inelastic demand are likely to be able to increase their dividends.

“Resource dividends are likely to fall by 10% or more in FY23 [from elevated levels] based on current commodity forecasts, according to Ausbil analysis.

“Modest growth in dividends is expected from the banks, but this is dependent on interest rates increases not sending the Australian economy into recession.”

Read more about:

AUTHOR

Add new comment

The content of this field is kept private and will not be shown publicly.

Recommended for you

 
sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

 

MARKET INSIGHTS

JOHN GILLIES

tHOSE 989 WHO ARE CEASED WILL GO ON TO LIVE A LONG AND HEALTHY LIFE JG...

2 days ago
Chris Cornish

What a sticth-up. Looks like Labor Senator Jess Walsh follows Stephen Jones who follows what the industry super funds ...

1 day 21 hours ago
Peter Swan

This report is a blatant display of far-left factional partisanship, treating superannuation funds as state property and...

1 day 22 hours ago

ASIC has cancelled the AFS licence of a Sydney wealth firm, the fifth Sydney firm to see a cancellation since the start of the year....

2 weeks 3 days ago

More than 20 winners from the funds management industry have been crowned at this year’s awards....

1 week 3 days ago

ASIC has obtained interim orders from the Federal Court to freeze the assets of a registered managed fund and prevent its former director from leaving Australia. ...

3 days 21 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND