Dividend payments in the Netherlands are on the rise

Despite the current economic situation, the financial daily reports that dividend payments from Dutch listed companies are increasing.

It is estimated that about 7% more dividends will be paid out this year than in 2011. This is based on analysts' expectation of 19.4 billion euros in distributions from companies from the AEX and the Midkap index.

The dividend yield for the AEX companies is expected to be 3.6%. For the Midkap index, the expected return is even 4.3%. Nevertheless, this dividend yield is 0.5% lower than the European average, but well above the American S&P 500, for example.

An important reason for this dividend growth is Shell's dividend increase. In addition, a dividend increase is expected for banks and insurers, such as ING.

This dividend growth represents a strong balance sheet and large cash position, according to the financial daily. At the same time, this also shows that these companies cannot or do not dare to use their cash position for further growth through investments and acquisitions. Still, a high dividend is good for confidence. A dividend cut would be seen as a sign of weakness and could bring down the stock.

An increase in dividend can also be a reason to buy the stock. Especially in this period when interest rates on safe government bonds are under pressure.

Source: fd.nl