The S&P/ASX 200 (ASX: XJO) finished broadly flat for the week whilst US stock markets continue to reach new heights.
Here are my three key investor takeaways from the week.
Good signs for dividends
If the experiences of the US investment banks are any sort of guide, the Australian banking sector may be in for a dividend bonanza in the next 12 months; whether they catch up to last year’s levels is a bigger question though.
In the US last week we saw multiple banks double their dividend payouts after passing regulatory stress tests and following the release of dividend restrictions applied during the pandemic.
The massive loan growth, powered by low interest rates, combined with banks simplifying their business models, may bode well for dividend-starved investors, at least in the short term.
But over the long-term, their business models continue to be marginalised by more nimble competitors.
Tide turning for stalwarts
The week also saw the tide turn for a number of ‘boring’ stalwarts.
Both Boral Limited (ASX: BLD) and Telstra Corporation Ltd (ASX: TLS) have been on a strong run lately with investors finally willing to accept Andy Penn’s vision for the future.
The sale of 49% of Telstra’s telecommunication towers, much earlier than expected, and for a solid price was a positive first step, whilst its product simplification is clearly paying dividends.
Property on fire for some
Sticking with the financial sector, May data has shown that investment lending for housing hit its strongest level since June 2015, with loan growth jumping 13.3 per cent in May.
This was an acceleration from the 2.1% in April and shows that first home buyers are once again being usurped by more aggressive investors.
