High dividend payouts lift equity returns

Total shareholder returns from the Australian Stock Market reached 30.5 per cent in the year to August 2005, the highest return since 1996. Companies paid out $36 billion in dividends in 2005, up from $30 billion in 2004. The average dividend yield increased to 4.5 per cent this year from 4.3 per cent last year. One reason for the slight increase in dividends was that companies increased payout ratios (a measure of dividend relative to reported profit).