BP crisis will trigger £10bn slide in 2010 dividend payouts

‘They also found their access to finance heavily constrained by the banking crisis,’ Taylor said. ‘Multinationals not only have a better spread of earnings, but their UK dividends also benefited from the pound’s devaluation. Now the economy is recovering, the fortunes of more UK-based firms are rebounding and they are more comfortable returning cash to shareholders.'

Cyclical versus defensive stocks

Furthermore, Capita pointed out cyclical firms are leading the charge towards recovery, and having languished at the bottom of the dividend rankings during the recession, are now feeling an upswing and growing payouts to shareholders.

Cyclical companies are ramping these up at a higher rate than defensives, which traditionally return shareholder cash at a steadier pace.

In 2009, only 14 sectors out of 39 increased their dividends, of which 11 were defensive.  In the first half of 2010 27 sectors upped their payouts.  Only one defensive sector, part of the food retailing industry, featured in the top 10 fastest growers, mainly thanks to a strong performance at Morrisons.