Raining Returns: Dividend payouts climb in Jamaica, although financial sector lags behind

Analysts at NCB Capital Markets state that the total dollar value of dividend payouts to investors over the last five years in Jamaica reached $173.83 billion - 5.7 per cent higher than the $164.5 billion in the five years prior.



In its December 2024 market guide, the NCB Capital Markets outlines that between FY20202 and FY2024 – a period of elevated inflation for Jamaica – annual dividend payouts recovered to pre-pandemic levels, although valuations stayed depressed.

Annual dividend payouts grew from $34.07 billion in FY2020 to $41.96 billion, reflecting a compound annual growth rate (CAGR) of 5.4 per cent over the five years.

“It l helped investors, particularly those dependent on dividend payouts as a source of income to retain some purchasing power and keep up with rising living costs,” the analysts commented

Growth in the five year period was subdued, however, in relation to the average of the last 15 years.

In that period, the analysts note, annual dividend payouts grew by an average rate of 12.4 per cent, outpacing the 6.3 per cent inflation rate over the same period.

In the last five years, dividend contributions from financial sector (FS) stocks underperformed, but other dividend payouts from EIM and M&D stocks bridged the gap left by financial companies

FS stocks, still responsible for nearly half of the dividend distributions, fell by $15.92 billion or down -17.0 per cent over the period. However, EIM and M&D stocks picked up the slack.

According to NCB Cap, for the EIM sector dividend payouts to investors increasing five-fold, distributing $21.36 billion compared to $4.03 billion in the five years before the pandemic. Most flowed from TransJamaican Highway Limited ($11.61billion) and Caribbean Cement Company distributing 4.57 billion.

Dividend growth from M&D stocks was impressive, the analysts note. The sector increased its cumulative distributions to shareholders over the five-year period by 43.4 per cent to $43.54 billion.

The analysts forecast that as rate cuts filter across the economy, “FS stocks, whose dividend payouts are down 35.5 per cent from their peak of $27.74 billion in FY2019, and their market cap down 48.4 per cent, should benefit from widening net interest margins, rising bond prices, and improved demand for credit.”

Information Source: NCB Capital Markets.

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