UAE ranks among 17 countries in dividend payout records

Khaleej Times

16-03-2025

The UAE has emerged as a standout player in the global investment landscape to rank among the 17 countries that set new dividend payout records in 2024.
As global dividends surged to an all-time high of $1.75 trillion, reflecting a 6.6 per cent increase year-on-year, the UAE enhances its reputation as a leading destination for income-focused investors.
The UAE-listed stocks are renowned for their stability and robust returns, attracting a growing number of investors who are keen on capitalising on the country's commitment to shareholder rewards. This commitment is particularly evident across key sectors such as banking, energy, and real estate, which continue to deliver compelling opportunities for dividend-seeking investors.
According to eToro (ME) Limited, a licensed entity regulated by the Abu Dhabi Global Market's Financial Services Regulatory Authority, the UAE's ability to keep pace with global markets is noteworthy. Josh Gilbert, a market analyst at eToro, emphasiaes the impressive performance of the UAE financial sector. 'The financial sector has been a standout performer, with UAE banks benefiting from higher interest rates and robust economic expansion,' he stated.
One notable example is Abu Dhabi Islamic Bank (ADIB), which has raised its dividend payout to 50 per cent of its annual profit, showcasing the strong earnings growth within the sector. This trend indicates a positive outlook for investors seeking reliable income streams.
Energy companies have also made significant strides in dividend payouts. Adnoc Gas announced a remarkable $3.41 billion dividend, bolstered by high oil prices and a commitment to a 5.0 per cent % annual dividend growth. This commitment reflects the company's confidence in its financial health and the sustainability of its operations.
The real estate sector has not lagged behind. Emaar Properties, a leading player in the market, doubled its dividend to Dh8.8 billion, driven by record property sales and heightened demand in the sector. This growth underscores the solid fundamentals that support these industries, providing investors with an attractive blend of income and stability.
For income-focused investors, dividends are more than just a bonus; they represent a critical component of a long-term investment strategy. Regular payouts create a dependable cash flow and offer the potential for compounding returns over time. The ongoing prioritisation of shareholder returns by UAE companies highlights the resilience of the local market, making it an appealing option for investors worldwide.
However, the sustainability of these dividends is a topic worth considering. Gilbert notes, 'While 2024 has seen record dividend distributions, certain increases, like Emaar's 100 per cent payout of its share capital, may not be repeated annually. These sectors are cyclical, and dividends could fluctuate with market conditions.'
He also draws parallels with global markets, pointing out that some leading Australian miners, such as BHP and Rio Tinto, have recently reduced their payouts due to a decline in iron ore prices. Yet, the robust underlying strength of UAE companies suggests that their dividend payouts will remain competitive, making them a reliable choice for investors.
'The power of dividends is often underestimated, especially by those in the early stages of their investment journeys,' Gilbert adds. 'Compounding is key, which is why starting early and maintaining consistency with investments is crucial.' While dividend-paying stocks may not exhibit rapid growth due to their payouts, they offer greater stability and lower volatility, making them ideal for long-term income-oriented investors.
Looking ahead, the dividend momentum in the UAE appears robust, supported by corporate profitability, favorable government policies, and sustained investor demand. The UAE market continues to present a wealth of opportunities, whether for those seeking high yields or for those looking to enhance their portfolios with reliable income streams.
Experts believe that the ongoing strategic investments and economic diversification in the UAE will further bolster its position as an attractive investment hub. As the country navigates through global economic challenges, its commitment to shareholder returns and market stability remains a focal point, making the UAE a market to watch for both local and international investors in the coming years.