Companies pay higher dividends

27/01/2011 15:00

Dutch companies quoted at the Amsterdam Stock Exchange paid out more than 11 billion euro in dividends to their shareholders in 2010. The increase by 1 billion euro relative to 2009 was entirely accounted for by non-financial companies. Over one quarter of dividends was paid out as optional dividend.

Only non-financial companies pay dividends

The highest amount in dividends was paid out by non-financial companies (nearly 11 billion euro in 2010), i.e. 1 billion more than in 2009, but still considerably below the amount in record year 2008.

The financial sector is still suffering from the after-effects of the financial crisis. Financial companies are in the process of restructuring their balance sheets and mostly lack the resources to pay high dividends. Financial companies paid out less than 200 million euro in dividends in 2010, approximately the same amount as in the previous year. In 2008, financial companies paid out nearly 6 billion euro in dividends.

Dividends paid out by quoted companies

Dividends paid out by quoted companies

More options for shareholders

Shareholders had a much wider range of options regarding how they want to their dividends to be paid out in 2010. Nearly 3 billion euro (26 percent) of the total amount of 11 billion euro was paid out as optional dividend, versus some 10 percent in 2008 and 2009.

After the recent financial crisis, banks are less willing to grant loans and tend to keep higher cash reserves. Optional dividend is payable in cash or shares and enables companies to keep control over a larger part of their profits. Eventually, nearly half of shareholders preferred to get paid in shares. Thus, more than 1.2 billion euro in cash remained in the company coffers.

Cash and optional dividend

Cash and optional dividend

Jos van Heiningen