Investors who ignore the short-term share market volatility are being rewarding with an increasing income stream.

Despite some heavy losses among resources stocks, a majority of major companies are increasing their dividends paid to shareholders.

Telstra, AMP, Caltex, Harvey Norman, Domino’s Pizza Enterprises, Coca-Cola Amatil and Flight Centre are among the stocks that announced dividend rises in this month’s profit reporting system, lifting average payouts further above the two — three per cent that savers are receiving on bank deposits.

An analysis by News Corp Australia of the largest 100 stocks has found that more three-quarters of those that reported profits had increased or maintained their dividends, while CommSec says dividends overall have climbed about 4.5 per cent.

CommSec economist Savanth Sebastian said the reporting season — which officially ends on Monday — had not been as doom-and-gloom as some were expecting.

“There’s a lot of good turnaround stories, which is encouraging,” he said. “We are just caught up in global volatility. In another period these results would have provided a boost to the market.”

Gerry Harvey has every right to smile after retailer Harvey Norman posted a 30.7 per cent profit jump. Picture: AAP / Dean LewinsSource:AAP

Since the start of February Australian share prices have fallen two per cent, and are down 7.5 per cent for the year after a horror January.

Mr Sebastian expected the rising dividend theme to continue as company CEOs and directors focused on keeping investors happy with dividend rises rather than spending on new business investment, which official data this week showed had “fallen off a cliff”.

Australian Stock Report head of research Chris Conway questioned why companies could not find better ways to spend shareholders’ money other than simply handing it back to them, but said there had been some relief among investors after a “very ugly period” at the start of the year.

“Most companies have either met or exceeded guidance, which is a pleasant surprise particularly when you consider it against the recent terrible US reporting season,” he said.

Mr Conway said the dividend growth had come from cutting costs rather than growing businesses, and said investors were still very wary about global issues such as China, US interest rates and massive oversupply of some commodities.

Baker Young Stockbrokers managed portfolio analyst Toby Grimm said while a majority of companies raised dividends, resources stocks cut heavier than expected. This week BHP slashed its dividend by three quarters, while Santos cut theirs by two-thirds.

He said the overall income yield from the share market was about 4.9 per cent, well above interest rates being offered for cash in the bank.

The outlook for dividends was steady-as-she-goes, Mr Grimm said.

“The earnings outlook isn’t particularly exceptional, but as long as there’s no collapse in earnings or a need to pay down debts quickly, there’s no primary driver to see dividends slashed.”

Baker Young Stockbrokers’ Toby Grimm is pleased with overall income yield from the share market about 4.9 per cent.Source:Supplied