Dividends of FTSE 100 rise dramatically

How can it be that, at a time when the economy is struggling, economic forecasts are gloomy, the government is cutting back its spending significantly, “shareholders in UK companies enjoyed strong growth in dividends”?

Growth in commodity prices helped mining companies in particular. Vodafone, in a sector reported to be “struggling”, posted the largest total dividend, £3.5bn.

Growth [sic] in dividends is expected to be ‘only’ eight percent in 2012.

Growth prospects do not seem to justify this level of growth in dividends. It therefore seems that companies unable to earn high returns are taking cash and returning it to shareholders. And the effect is limited to the largest UK companies — the FTSE 100.


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