ASX shares, on average, paid out fewer dividends during the first quarter of the year than they did in Q1 2020. The fall, however, was less than their international counterparts.
And analyst consensus opinion is that we'll see ASX shares upping their dividend payments in the latter half of the year, primarily thanks to mining and bank shares.
Why these experts see higher dividend yields ahead
Jane Shoemake is a client portfolio manager for global equity income at Janus Henderson Investors. Janus Henderson forecasts that ASX shares will boost their dividends by 40% in 2021, year-on-year.
According to Shoemake (quoted by the Australian Financial Review):
We are optimistic that Australians will experience a good year for dividends in 2021. With Australia's dividend payers still so heavily concentrated, investors will be well-placed to take advantage of the commodity price boom supporting mining dividends and the dividend recovery of the big banks…
Australia's concentration in a small number of dividend payers is likely to prove a tailwind in the recovery, as the local economy gets back on track and banks look to normalise their dividend payments, albeit at lower levels than prior to the pandemic…
Considering the outlook for mining stocks is also good because of the commodity price boom, the country's dividend concentration will – on this occasion – work to Australians' advantage.
Hugh Dive, Atlas Funds Management chief investment officer, also has a bullish outlook for ASX shares dividend payouts. According to Dive:
We don't see any massive cuts so the outlook for dividends is generally positive.
Refugees from term deposits and bonds will still be coming to the market… Banks are balancing being prudent and wanting to reward shareholders who were hit hard last year… It's hard to see massive spikes in unemployment or loan losses from current levels and house prices don't look to be falling, so it makes the banks' security look better.
The big miners are expected to be quite generous with their dividends in the August reporting season and will probably be the peak for dividends there. Unlike other [commodity price] spikes, they haven't made poor acquisitions. They're in a much better situation to pass on higher commodity prices because they're not doing anything new.
5 ASX shares tipped to pay higher dividends
Dive named 5 ASX shares he expects will be lifting their dividend payouts from last year's corresponding levels. Though dividend yields may remain below their 2019 levels.
According to Dive (quoted by the AFR), "The miners will pay higher dividends and overall, the economy is in relatively robust shape. Stocks like Ampol, JB Hi-Fi, Macquarie Group, Sonic Healthcare and Wesfarmers should all pay higher dividends."
Here are the trailing dividend yields for these 5 ASX shares:
- Ampol Ltd (ASX: ALD) pays a dividend yield of 1.7%, 100% franked.
- JB Hi Fi Limited (ASX: JBH) pays a dividend yield of 5.6%, 100% franked.
- Wesfarmers Ltd (ASX: WES) pays a dividend yield of 2.9%, 100% franked.
- Macquarie Group Ltd (ASX: MQG) pays a dividend yield of 3.1%, 40% franked.
- Sonic Healthcare Limited (ASX: SHL) pays a dividend yield of 2.5%, 30% franked.
You can find the list of 10 top ASX dividend shares here.