The firm’s latest global equity study analysed the largest 1,600 companies globally by market capitalisation, examining how companies generate, grow, and return value to shareholders.
According to the report, Australia remains a real weak spot.
While global dividends hit new highs in Q3, Australia’s core payouts fell 7.4 per cent, which Capital Group explained is “largely a result of steep cuts from mining groups, in particular BHP, and from Woodside Energy”.
“This reflects lower profits in both the mining and chemicals and the oil, gas and energy sectors, which accounted for one-third of Australia’s Q3 dividends.”
Meanwhile, Australia’s banks, which made up another one-third of the Q3 total, are only increasing dividends very slowly as they already have very high payout ratios.
“ANZ, for example, made no increase at all; National Australia Bank posted a rise of just 1.2 per cent, while CBA managed 4 per cent,” the report said.
Capital Group said the remaining one-third of companies managed core growth of 3 per cent, but this was still modest and not enough to boost the national total significantly.
“The decline in Australia’s topline rate (-11.3 per cent) was more severe than that in the core rate (-7.4 per cent), mainly owing to the weaker Australian dollar compared to Q3 2024.”
In the first nine months of the year, Australian core dividend growth was -9 per cent, the weakest of any major market in the index.
UK companies paid shareholders US$27.2 billion in the third quarter – the second-weakest dividend performance in Q3 after Australia.
“A few companies making big cuts were responsible for the Q3 decline - Vodafone, Rio Tinto, Anglo American and Glencore collectively knocked over six percentage points off the growth rate,” the report stated.
“These more than offset the positive impact from the restart of Rolls-Royce dividends and large increases from domestically focuses banks (not HSBC), among others.”
US$58.1 billion was returned to shareholders in the Pacific region, excluding China, Hong Kong, and Japan, in Q3 of 2025 – up 13.8 per cent on the prior corresponding period, with Australia paying out US$17.3 billion.
Emerging market Taiwan saw the strongest dividend growth, with payouts surging by 25 per cent on a core basis to US$30 billion. Meanwhile, Singapore saw slower growth in the first half, owing to a cut from Singapore Airlines.
“The whole region saw 9.3 per cent core growth in Q3, well ahead of the global average. Over the first nine months of 2025, where Australia has a larger weight in the regional figures, core growth was 7.3 per cent,” the report stated.
Globally, dividends continued their impressive run in the third quarter - rising 6.2 per cent year-on-year to US$528.7 billion on a topline basis, a Q3 record.
“The outcome in the third quarter was a little better than we expected, thanks mainly to even greater strength than we projected for Taiwan, Hong Kong and Europe ex-UK.”
Andy Budden, equity investment director, said the result extended an unbroken four-year sequence of quarterly highs.
“For investors, diversifying globally can unlock real benefits. It can ensure access to enduring sources of dividend growth such as the US, where consistency and resilience are underpinned by the diversity of its stock market and robust profit momentum, to global sector trends like the current strength among financials, or to regions experiencing periods of significant growth like Europe,” he said.
Financials accounted for nearly half of global growth in Q3, led by banks and insurers.
US payouts hit a record US$179.3 billion in the quarter - an increase of 6 per cent on a topline basis and 5.7 per cent on a core basis - driven by strong contributions from tech and financials.
Across the globe, 88 per cent of companies increased or held payouts steady in Q3; median growth was 5.7 per cent.
Financials accounted for nearly half of global growth in Q3, led by banks and insurers.
Looking ahead, Japan is expected to be a major Q4 growth driver, with European banks and Pacific markets also strong.
Capital Group has raised their full-year 2025 projection to a record US$2.08 trillion in total payouts, up 6.4 per cent on a topline basis, equivalent to core dividend growth of 5.8 per cent.
