FTSE 100 dividend forecasts fall 10% for 2023 and 2024

investmentweek.co.uk:

Dividend payouts are still concentrated in the market, with 55% (£42.8bn) of all FTSE dividend payouts set to come from just ten stocks in the blue-chip index, while the top 20 are set to deliver 74% of total dividends, or £57.3bn.

The current overall total of ordinary dividends, special dividends and share buybacks for the FTSE 100 is second only to last year's, coming in at £137.2bn, compared to £137.6bn, AJ Bell's latest Dividend Dashboard report revealed.

This equated to a cash yield of 6.9% for the FTSE 100 in 2023, with buybacks in 2023 currently totaling £54.7bn, close to 2022's high of £58.2bn.

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This compared with 4.5% for two-year gilts and 4% for ten-year gilts, although Russ Mould, investment director at AJ Bell, added that seven firms currently offer a forecast dividend yield of 8% or more.

Considering the dividend yield alone, AJ Bell said the combination of the index's £2trn market cap and aggregate ordinary dividend forecasts of £77.8bn for 2023, and £83.7bn for 2024, meant the FTSE 100 forecast dividend yield was of 3.9% for this year and 4.2% for next, a 10% reduction from estimates at the start of the year.

Mould warned the FTSE 100 continued «to paddle sideways», as the index was «no higher than 12 months ago, or indeed six years ago», sitting at odd with the strong growth in the US.

Dividend payouts are still concentrated in the market, with 55% (£42.8bn) of all FTSE dividend payouts set to come from just ten stocks in the blue-chip index, while the top 20 are set to deliver 74% of total dividends, or £57.3bn.

Global dividends fall 0.9% as big companies slash payouts

Dividend growth remains similarly