Aussie Dividends Lagging Global Trend

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Dividends are experiencing a firm uptrend globally but Australia is not keeping up. Gone are the days when iron ore producers featured among the world's top payers.

-ASX' Top dividend payers are paying out less
-Iron ore miners, energy companies are reducing payouts, with further cuts expected
-Globally dividends are experiencing strong uptrend
-Japan’s structural pivot toward shareholder returns includes strong growth in dividends

By Rudi Filapek-Vandyck

Gone are the days when Australia’s largest iron ore miners sat on top of the world for largest annual dividend payments to shareholders; that was so 2021.

This year, top dividend payers are largely made up of US and European listed companies let by Microsoft, Nestle, Novartis, Exxon Mobil and HSBC Holdings.

The world’s number one ranking remains with China Construction Bank Corp, which has managed to consolidate its position as the world’s largest dividend payer (although by paying out less than in the year prior).

Domestically, BHP Group ((BHP)) and Rio Tinto ((RIO)) remain top dividend destinations on the ASX, paying out respectively US$7.4bn and US$7bn in their fiscal 2024 years.

‘Seven’ is also the magical starting number for CommBank ((CBA)), albeit in Australian dollars, with Australia’s largest lender paying out $7.8bn to its shareholders in FY24.

Alas, the trend is not that favourable for shareholders in each of Australia’s heavyweight dividend payers.

For the fiscal year to June 30, 2025 BHP Group paid out -US$1.8bn less. Fortescue ((FMG)) equally reduced its payout to $3.4bn from $6.1bn in FY24.

Rio Tinto’s fiscal year runs January-December and its half-yearly payout of US$3.8bn was -7% below the US$4.1bn paid out for the first half of 2024.

CommBank, on the other hand, still managed to increase its payout to $7.94bn in FY25.

As indicated, the latest global rankings by Capital Group no longer features any of Australia’s dividend champions inside the Global Top 20.

Source: Capital Group

Capital Group’s global study shows global dividends surged to a record US$1.14trn in the first half of 2025, with Australia one of the few weak spots as falling commodity prices forced big miners to cut cheques to shareholders.

Capital Group’s Global Equity Study – Dividend Watch (Edition 1, Sept 2025) tracks payouts across the world’s 1,600 largest listed companies.

The global picture

–Topline growth: Worldwide dividends rose 7.7% year-on-year in H1; on a cleaner “core” basis (excluding FX moves, timing shifts and specials), growth was 6.2%.

Ordinary dividends have risen to fresh highs, with specials still elevated but a touch lower than 2024.

–Sector leader: Financials did the heavy lifting, paying a record US$299bn and accounting for roughly two-fifths of global growth.

Banks led, with names from Japan (Mitsubishi UFJ), the US (JPMorgan) and Singapore (DBS) among the biggest dividend lifters.

The situation looks less buoyant for Australian banks who paid out less in the first half because Westpac ((WBC)) paid a special last year that was not repeated.

Equally so: when three of Australia’s Big Four report FY25 financials in November total dividends paid out by ANZ Bank ((ANZ)) and Westpac ((WBC)) for the year are projected to fall short of last year’s numbers.

–Regional stand-outs: Japan was this year’s breakout story with 13.8% core growth, reflecting record profits and a shift toward shareholder returns.

Continental Europe grew more slowly (5.6% core) as auto makers trimmed payouts.

–Where growth may slow in H2: The report notes the seasonal mix in the second half favours slower-growing regions –the UK, China and Australia– implying a softer global run-rate into year-end.

Australia: miners drag, specials mask the pain

–Core trend: Australia’s core dividends fell -10.6% in H1 2025. The culprits were cuts from BHP, Fortescue and Rio Tinto, which together shaved -US$2.4bn from payouts as lower commodity prices pressured cash flows.

Woodside Energy ((WDS)) and Santos ((STO)) also reduced.

–Topline vs reality: Headline payouts in US dollars dipped -2.3%; in Australian dollars they rose 1.0%, flattered by a very large special dividend from Suncorp Group ((SUN)) following the sale of its banking operations to ANZ Bank.

–Concentration effect: The study stresses the ASX’s heavy skew to a handful of miners, energy majors and big financials, making it “hard for the second tier to make much impact” when the giants tighten the taps.

What it means for Australian income investors

–Expect a patchier H2: With seasonality leaning toward Australia and other slower cohorts, headline growth is likely to cool in the back half.

–Banks vs resources: Globally, banks and insurers are supporting dividend growth; resources are the laggard.

That mix argues for diversified income beyond the local miners (and energy producers).

–Watch Japan’s reform tailwind: For investors not afraid to move offshore, Japan’s structural pivot toward shareholder returns –and double-digit core growth– offers a contrasting income stream to Australia’s commodity cycle.

On current forecasts, BHP is expected to reduce its dividend in FY26, and again in FY27. Rio Tinto, whose fiscal years runs January-December, is expected to pay out less for 2025 than last year, but with an increase expected next year.

Fortescue’s annual dividends are equally projected to reduce in each of FY25 and FY26.

Woodside Energy cut its dividend in 2024 and is projected to cut again in each of 2025 and 2026. Consensus sees Santos paying out less in 2025, but expects this company to lift its dividend next year.

For more details: see Stock Analysis on the website.

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