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Which ASX sector is the biggest dividend payer so far this year?

The materials sector has been pleasing passive investors the most in 2021…
The post Which ASX sector is the biggest dividend payer so far this year? appeared first on The Motley Fool Australia. –

We all know that ASX dividends are the lifeblood of many Aussie investors. But which sector has been the biggest dividend payer so far in 2021?

Many sectors have experienced an improvement in earnings year over year. However, there is one sector that tops the rest as the biggest ASX dividends payer year to date.

Striking gold with ASX dividends

In an era where interest earnings on savings hardly beat inflation, many people have turned to passive investing to make their money work for them.

Luckily, Australia has historically been a high dividend-paying market.

In the latest Global Dividend Index report from asset manager Janus Henderson Group, 2021 is set to be another great year for ASX dividends.

The report reveals that investors received more than $40 billion in dividends in the third quarter alone.

A keen investor might be wondering: Which particular sector is this bounty coming from?

For Australia, the sector that has produced the greatest amount of dividends for ASX investors across the first 3 quarters is the materials sector.

Collectively, Australia’s mining companies tripled their dividend payouts in the third quarter from the previous corresponding period. In total, the sector handed out a handsome $25.4 billion in dividends to its shareholders.

Some notable contributors included Fortescue Metals Group Limited (ASX: FMG), BHP Group Ltd (ASX: BHP), and Rio Tinto Ltd (ASX: RIO). Astonishingly, the payouts from Fortescue and BHP combined amounted to nearly half of all dividends paid in Q3.

The proportion of dividends that miners pay is anticipated to increase after BHP finalises its sole listing on the ASX. At present, the world’s largest dividend payer shares its ASX listing with the London Stock Exchange. However, this is set to change in the first half of 2022.

Will it continue?

As with all things in investing, past performance doesn’t indicate future performance. It’s hard to reasonably tell whether the good times will keep on rolling for ASX-listed miners and their dividends.

Janus Henderson tends to think the strong payouts from mining companies are not likely to be sustained next year. This is due to some weakening in commodity prices since the end of the previous quarter.

The asset manager said banking dividends might fill some of the void in the year to come.

The post Which ASX sector is the biggest dividend payer so far this year? appeared first on The Motley Fool Australia.

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More reading

Potential buys: 2 compelling ASX shares

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Own Rio Tinto (ASX:RIO) shares? Here’s why the miner just bought into this battery maker

Is BHP (ASX:BHP) trailing its rivals on climate action?

Why Best & Less, BHP, Mesoblast, and Nearmap shares are falling

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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