Tough times sees quality shares rise to the surface

Beats and misses of Reporting Season reveal new themes.

Rudi Filapek-VanDyck, Editor of FNArena, has crunched reviewed the numbers to separate the leaders from the laggards as well as the noting that Australian dividends are down across the board.

FNArena numbers show that the final percentages of the August Reporting Season stand at 24.4% (77 companies) "beats" versus 25.3% (80) "misses".

The laggards are building materials and retail landlords, add in most miners and energy companies plus aged care providers, industrials (ex banks), telcos, and financials.

The mining companies have some stand outs in the nickel and gold space and some new leaders have emerged from bricks and mortar retailers, some off low expectations after years of losing out against online sales.

What's also propelling the leaders are the macro tailwinds with the general background made up of central banks loosening policies, including the RBA, and a global investment community thirsty for yield. A weakening Aussie dollar will be keeping hopes alive that more of the benefits will start showing up in the six months ahead.

AMP Cheif Economist Shane Oliver reports only 58% of companies have seen earnings rise from a year ago compared to 77% this time a year ago. In addition, only 49% of companies raised their dividends, well below the norm of 62%, while 28% of companies cut their dividends, the most in the last seven years.

CommSec analysts note that dividends in total only grew because companies including Rio Tinto, ASX, Coles and Medibank Private paid out special dividends. Excluding these, aggregate dividend payments fell by -0.6%.

More details can be found in FNArena's Weekly Insights and previous interviews on Finer Market Points.