Australia lags in record year for dividends

Binaya Dahal

Editorial Intern, Financial Newswire

26 February 2026

Australian dividends performed poorly in 2025 while rest of the world surged to a record high, as steep cuts in mining and energy sector payouts drove the core growth rate down 6.7%, Capital Group’s latest Equity Study has found.

The report which analyses global equity trends by tracking the world’s largest 1,600 companies, focusing on dividend growth and dividend yield across regions and sectors revealed that the Australia’s core dividend growth across the first nine months of the year was negative 9%, the weakest among the major economies in the list.

As per the report, mining was the main culprit behind the decline with companies in the index cutting distributions by $3.8 billion with BHP and Fortescue making the largest reductions.

In the first half of the year alone, cuts from BHP, Fortescue and Rio Tinto totalled $2.4 billion, amounting to 13 percentage points axing from national dividend growth.

The report said energy companies including Woodside Energy and Santos also trimmed distributions significantly, which further compounded the problem.

The four major banks contributed more than a quarter of total dividends but delivered minimal growth, whereas a large special dividend from Suncorp, resulting from the sale of Suncorp Bank to ANZ, helped soften the topline decline.

Despite the poor result, Head of Australia Client Group at Capital Group, Jorden Brown said the dividends still provide a dependable source of income across market conditions for Australian investors.

“Dividends are one of the most tangible ways companies share their success with investors, and in an environment dominated by geopolitical uncertainty, tariff tensions and alternating phases of volatility, companies that pay dividends and show they can grow them sustainably over time offer stability to portfolios,” Brown said.

However, global dividends in 2025 hit a new annual record of US$2.09 trillion after gaining 7% year-on-year rise on a topline basis, and 6% after adjusting for exchange rates.

The report stated that financials were the key driver behind this boom as insurance and general financials posting increased 12.5% and 16.8% respectively, whereas technology delivered the second-fastest growth led by software and IT services, which recorded a 13% rise.

Head of Asset Class Services, Europe and Asia-Pacific at Capital Group, Alexandra Haggard said the growth was supported by robust earnings and broad‑based strength across regions and sectors, with only limited pockets of weakness.

“Looking at 2026, there are many encouraging signs for the year ahead with global equity markets broadening, more companies driving returns and dividends well supported by the earnings outlook,” Haggard said.