Michael Price, portfolio manager of Ausbil’s Active Dividend Income Fund, which oversees approximately $21.5 billion, anticipates a 3 per cent increase in dividends per share across the Australian market over the next 12 months. Ausbil Investment Management is an Australian-based investment manager. The firm offers various investment strategies, including equities, property securities, fixed income, and alternatives.
Price expects industrial companies to lead this growth with high single-digit dividend per share increases. Conversely, bank dividends are likely to remain relatively flat. While iron ore and fossil fuel companies are expected to reduce dividends, Price believes resource companies will perform better than current market expectations. Consumer-facing companies demonstrated unexpected strength, resulting in special dividends from Wesfarmers, JB Hi-Fi, and others.
An emerging trend is the preference for share buybacks over unfranked dividends, evidenced by a record number of buyback announcements from companies like Brambles, CSL, and Telstra. Rising share prices have outpaced dividend growth, causing the forward dividend yield to reach a 30-year low. Consequently, traditional dividend stalwarts such as Commonwealth Bank and Wesfarmers now offer below-average market dividend yields.
Price highlighted Ramelius Resources, a mid-size gold sector company recently added to the ASX 100, as a noteworthy stock. The company has doubled its gold reserves through a strategic acquisition and is managing capital expenditure to facilitate higher dividends. Price also noted significant share price volatility during the recent reporting season, with consumer discretionary, real estate, and financial companies showing stronger results.
