CAC 40 Companies Maintain Record Payouts Despite 12.4% Profit Decline

In 2024, companies listed on the CAC 40 index in France have maintained record payouts to shareholders, despite a significant decline in profits. This strategy, which has pushed the payout ratio to a historic high of 54%, has raised questions about the sustainability of this model in an environment marked by sluggish growth, increased inflation, and unstable markets.

The combined net profit of the forty largest listed French companies fell by 12.4% between 2023 and 2024. However, dividends paid reached 73 billion euros, the same amount as in 2023. This situation has led to a payout ratio of 54%, up from 49% the previous year. Economists suggest that this strategy aims to attract long-term savers and stabilize capital.

This redistribution policy is particularly driven by certain sectors, such as banks, energy, and utilities, which are historically inclined to pay high dividends. These sectors, however, do not necessarily show strong growth prospects. The rise in the payout ratio in 2024 is mainly linked to banks that paid more dividends last year due to their good results.

Key features of the current French model include mature companies favoring yield over reinvestment, an average dividend yield around 4% attractive to savers seeking stability, and at least 15 CAC 40 companies now considered yield stocks. This strategy aims to compensate for the lack of rapid valuation, unlike tech or growth stocks.

This positioning gives the CAC 40 the image of a safe haven financial center. However, the choice to prioritize redistribution at the expense of investment is already drawing criticism, especially in a context of accelerated innovation. Unlike French companies, US companies in the S&P 500 adopt a radically different strategy. The expected payout ratio for the US index will not exceed 30% this year. While shareholders are equally pampered across the Atlantic, it is through other mechanisms, notably stock buybacks.

This approach has the advantage of mechanically supporting the stock price while maintaining financial flexibility, unlike dividends which directly affect reserves. Such strategic divergence raises concerns about the medium-term competitiveness of CAC 40 companies. By favoring a rigid distribution policy amid declining profits, they expose themselves to a weakening of their investment capacity at a time when energy transition, digitization, and innovation require massive capital.

Especially since in a world where alternative yield products are booming, whether it be crypto staking, decentralized finance, or new tokenized savings products, the promise of a stable dividend is no longer enough to captivate the most dynamic investors. The current strategy of French companies, while reassuring in the short term for traditional shareholders, could face the limits of a rapidly changing financial world. Faced with more agile international competition and the rise of alternative reward models, a redefinition of priorities will likely be necessary. The issue is no longer just to attract the classical saver but to respond to the rapidly evolving expectations of investors in a world increasingly oriented toward programmable and decentralized finance.