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In Focus no. 84 Mette Rosborg Aagaard, MSc (Econ.), and associate professor Johannes Raaballe, Department of Management, University of Aarhus, describe the findings of their study of dividend payouts made by Danish listed companies during the period 1987-2001.
Among other things, the study shows that the companies’ effective dividend payouts remained unchanged throughout the period 1987-1993. However, the portion of dividend distributing companies fell from 80 per cent to 60 per cent, consequently, the companies that distributed dividend increased the payouts. From 1994 to 2001, the shareholders in Danish listed companies saw their dividends multiplied by 7. If we disregard the extraordinary dividends paid by DFDS and NKT Holding in 2001, dividend payouts multiplied by approx. 5. During the same period, the population of dividend distributing companies grew from 60 per cent to 70 per cent, however, the most significant factor behind the rise in dividend was the fact that the dividend distributing companies raised dividend payouts significantly. The authors also show that there is great stability in the dividend pattern of the individual company. Prior to 1999, there were hardly any share buybacks in Denmark, when you disregard TDC’s share buy-back programme in the early 1990s.
Finally, the article compares Denmark to the USA, and the authors conclude that Danish dividend payouts are now on a par with US dividend payouts.
Read more about the subject in the article ‘Unprecedented dividend levels in Danish corporations’ in Focus no. 84.
