Out of the FTSE 100, the UK flagship index of the 100 largest companies, 5 PLC’s paid about 36% of all the dividends paid. Incredible to see the reliance of pension funds and income investors of a few companies.
But one thing is sure for dividend paying companies, they are able to pay cash to investors which is a clear sign of good management and corporate governance. The ability to manage the business and generate cash.
In Emerging Markets, like India, Brazil etc, companies too are now able to pay dividends, showing a level of maturity in the market. Also one has to note that law and politics are an issue, so holding shares in say the Brazilian energy giant, Petrobas is lucrative, as in Brazil companies have to pay by law 25% (at least) of their profits in dividend payment.
An amazing snippet I have found, is that there are about 18,000 listed companies in Asia (this excludes Japan, New Zealand & Australia), of which nearly 9,000 paid dividends to shareholders in the past 12 months. Perhaps one can make an assumption that there is the realisation that many emerging markets are not so emerging anymore.