Now the Australian reporting season is passed.
What caught my eyes.
In general it was better than expected, but in a “priced to perfection” market who missed the target got severely punished (Seek , Woolworths and CSL as an example). And it could even happen to our beloved banks!
This is something to keep an eye. In this market any error can cost a fortune.
Resources are still under pressure, but less on the bigger scale – but only because they can do cost cutting – not any special management skills.
Worryingly, the dividend payout ratio for industrial is 86.3%. This is at historical max and tells us three things.
– This market is sustained only by dividends
-The companies cannot allocate capital to better use (expansion/ more revenue) so they are practically returning capital. All nice, but where is the future growth?
-For how much time can Australian companies sustain this dividend payout ratio. Maybe even for some years, definitely not forever.
Practically the situation is quite nice, but the outlook is quite dim.
Or the CEOs of the ASX listed companies start to think of new strategies and get their confidence back – or this could be a last hurrah for the Australian economy. The weak Australian Dollar and low interest rates (going lower) are a good support, but at the end they are a support to a growth that seems missing at the moment.
investorpolitico 