What's going on?

The year�s dividend payouts are on course to pass pre-pandemic levels by the end of 2021, so you can relax: the last couple of years was all just a bad dream.

What does this mean?

Companies across the board cut their dividend payouts last year, nervous that they wouldn�t have enough cash on hand to outlast the pandemic. This year, though, they�ve been feeling more confident about sharing their profits with investors. Case in point: 90% of all companies either raised dividends or kept them steady last quarter, paying out $404 billion in total � up 22% from the same time last year. And that � along with strong analyst predictions for this quarter � suggests global dividend payouts this year are on track for a new annual record.

Why should I care?

Zooming in: Winners become losers.
The uptick in dividends last quarter was driven primarily by both the mining sector � which benefited from strong commodity prices � and the banking sector, which was released from tight pandemic-induced restrictions (tweet this). But the two sectors might have very different outlooks going forward. Miners� profits � and, by extension, their payouts � are at risk from falling commodity prices, which are looking increasingly likely as supply bottlenecks start to clear. Banks� loans businesses, meanwhile, look set to profit from higher interest rates, not least because the head of the Federal Reserve � who is planning to hike rates next year � was re-appointed on Monday.

The bigger picture: Back to old faithful.
The absence of dividend income has been felt keenly by everyone from pension funds to charities � those that rely on a steady influx of cash to fund their commitments. They�ve instead been having to rely on bonds, whose rock-bottom yields have made it seriously difficult to generate a stable income. This bounceback, then, will come as welcome news going forward.