Only 14 FTSE 100 firms have raised dividends each year for the last 10 (2024)

The number of FTSE 100 firms that have paid out rising dividends each year for the past decade has fallen by more than 40 per cent since the start of 2020.

Projected dividend payouts for this year have also fallen by almost a third over that period from £91billion to £62billion, according to analysis from investment platform AJ Bell.

It said the coronavirus pandemic has 'decimated' its previous forecasts with many of Britain's most prominent companies slashing or even cancelling their dividend payments.

Only 14 companies have awarded their shareholders at least ten consecutive hikes in their annual dividend payments since 2010, compared to 25 at the beginning of the year.

Businesses that have recently cut their payouts include Primark owner Associated British Foods and engineering firm Johnson Matthey.

ABF has seen its sales devastated by the coronavirus pandemic because it was forced to close the doors of all its Primark stores and the clothing retailer had no online presence to offset the loss in sales from its high street shops.

Total sales for ABF plummeted by 39 per cent to £2.6billion in its most recent quarterly results with the firm's retail wing experiencing a three-quarters drop in sales to less than £600million.

'The demise of so many dividend growth streaks shows just how hard it is to increase the annual shareholder distribution for a decade or more,' the report stated.

'Any firm which can achieve a streak of ten or more increases in its annual dividend must, on balance, be doing something right,' it added.

Only four of the fourteen firms that have maintained a ten-year run of annual dividend growth were in the FTSE 100 a decade ago. They are Legal & General, Sage, Diageo and British American Tobacco (BAT).

AJ Bell found that industrial equipment rental business Ashtead Group has had the highest total shareholder return in the last decade, however.

Its total growth was 2589.6 per cent, which was over two and a half times more than the second-best performing firm Halma, whose return was 932.4 per cent.

By contrast, the average total return of a FTSE 100 company was 74.9 per cent, while for the 14 'serial dividend raisers,' it was 621.9 per cent.

Other companies to have kept a consistent run of expanding dividend payouts include Hargreaves Lansdown, insurer Legal & General, product testing business Intertek and water utility giant Pennon Group.

These firms have all kept expanding their dividends despite the recent coronavirus-induced economic crisis that has caused overall shareholder rewards to be scaled back.

Even oil giant Royal Dutch Shell, widely considered a stablelong-term investment for pension funds, cut its dividend this year for the first time since 1945 in response to the plunge in oil prices.

AJ Bell still anticipates the oil company paying out £4.03billion in dividends, the third-largest amount for FTSE 100 firms this year. Rival BP is expected to take the top spot with a £6.7billionpayout while BAT will likely take second place with £4.97billion.

The investment platform said though that 'it would not be the biggest surprise in the world' if BP decides to reduce its dividend.

'Falling oil and gas prices are pressuring its cash flow, new boss Bernard Looney wishes to reinvent the firm so it is ready for a low-carbon future and net debt is way higher than a decade ago,' it observed.

BP and Shell are just two of the 20 stocks that AJ Bell forecasts will reimburse shareholders with nearly 75 per cent of the FTSE 100 Index's total payout, at £45.8billion.