Dividend growth hits three-year low in Q2 as large caps falter

Dividend growth fell to its lowest level in over three years in Q2 as large caps struggled to maintain dividends in the face of strong sterling and a slowing global economy.

Dividend payments dropped from £30.7bn in the first quarter of 2014 to £25.8bn in Q2, according to the quarterly Capita UK Dividend Monitor, driven by slowing earnings and a stronger pound. That amounted to dividend growth of just 1.2% on the quarter. Furthermore, the top 15 dividend-paying firms saw their dividends fall by 0.8% year on year, with eight companies seeing payouts decline. Seven out of the top 15 dividend-paying companies declare their earnings in US dollars and were therefore hit by the pound touching five-year highs against the dollar over the period. The top-five b...