One in five FTSE 100 and FTSE 250 companies had annual dividend yields of less than 1% up to 23 November, according to a report from ETF provider Graniteshares, while oil companies drove record global pay-outs in Q3.
Based on the share price of each company on 23 November, and the total dividends declared over the preceding 12 months, Graniteshares found that seven FTSE 100 companies had annual dividend yields of zero, while a further six posted yields of less than 1%.
In the FTSE 250, a total of 45 firms recorded dividend yields of zero, while 12 more companies had a yield of less than 1%.
Global dividend pay-outs have had a bumper year in 2022, but the soaring profits of oil companies benefitting from the energy crisis have papered over some cracks.
Q3 saw firms pay out a record $415.9bn (£350.1bn) according to the Janus Henderson Global Dividend Index. However, without the $19.9bn (£16.7bn) increase in dividend payments from the oil sector, the global total would have been flat year-on-year.
The picture in the UK is still relatively strong, but Link Group reported a Q3 dividend performance that was “weaker than expected” after a “softness” in consumer basics, and a 21% decline in mining pay-outs.
Graniteshares’ founder and CEO Will Rhind said total dividend pay-outs were indeed still strong in the FTSE 100, but a substantial number of individual stocks still had annual dividend yields of less than 1%. He added that very few companies had bettered inflation this year.
Rhind continued: “With the FTSE 100 and 250 both down year to date, annual yields are under strain despite dividend increases, and the pressure is likely to build next year as the UK and other countries go into recession.”
Dividend yields averaged 3.74% for the FTSE 100 across the 12 months to 23 November, higher than the FY 2021 figure of 3.18%, according to Dividenddata.
The FTSE 250 posted a marginally lower dividend yield of 3.12% in the year to 23 November.
Despite the low yields of some UK companies, Graniteshares said that dividend cuts have largely abated this year, with just two FTSE 100 and five FTSE 250 firms cutting or suspending pay-outs.
