Economic recovery is on the horizon… Dividend increases as FTSE 100 companies shrug off Covid’s doom.
Royal Dutch Shell, Diageo, Lloyds Banking Group, and Anglo American all announced intentions to return £7.2 billion to shareholders in dividends and share buybacks yesterday, cheering investors.
All have profited from the global economic recovery, as well as surging commodity prices in the case of Shell and Anglo American.
Because of the coronavirus pandemic and concerns about the economy, corporations cut dividends and froze share buybacks last year, which disappointed investors.
“No one would begrudge investors rushing home to pop open a bottle of fizz – it’s just been that kind of a day,” Danni Hewson, financial analyst at broker AJ Bell, said. A robust crop of earnings, bolstered by reports of some sizable dividend payouts and nothing too taxing from the other side of the Atlantic.”
Due to its outstanding performance, Shell will pay a second-quarter dividend of 24 US cents per share, worth £1.34 billion, as well as return £1.43 billion through share buybacks.
It achieved an £8.9 billion pre-tax profit in the first half of this year, compared to a £13 billion deficit the previous year. The company’s revenue increased by 25.6 percent to £83 billion.
Lloyds Banking Group reported a pre-tax profit of £3.9 billion in its half-year results, compared to a loss of £602 million the previous year.
Lloyds will pay 0.67p per share to shareholders, a dividend of £475 million, after the Bank of England permitted lenders to resume payments earlier this month.
Diageo, the owner of legendary brands like Guinness, Smirnoff, and Johnnie Walker, said that it will pay a final dividend of 44.6p per share to shareholders for the fiscal year ending June 30. Despite the outbreak, the company’s pretax profits increased by 81.4 percent to £3.7 billion.
Anglo American, meanwhile, announced record first-half results, with profits soaring tenfold to £3.7 billion.
It expects to pay a $1.71 per share interim dividend of £1.5 billion, as well as £1.43 billion in share buybacks and a special dividend.