France: CAC 40 companies pay record dividends

Despite a decline in profits, CAC 40 companies redoubled attention to their shareholders. In 2024, they maintained record payments, in reverse of traditional economic signals. In an environment marked by growth at half mast, increased inflation and unstable markets, this strategy questions. Is it a sign of strength or a risky bet? While shareholder profitability remains a priority, the discrepancy between distributed profits and actual performance triggers doubts about the sustainability of this model.

Decreased profits, but an increased redistribution

While the CAC 40 had passed under 6,900 points because of geopolitical tensions, the last barometer published by EY reveals a striking contrast.

Indeed, CAC 40 companies maintained an exceptional level of redistribution to their shareholders in 2024, despite a significant drop in their results.

The cumulative net profit of the forty largest French listed companies fell 12.4 % between 2023 and 2024. However, the dividends paid reach 73 billion euros, exactly the same amount as in 2023.

This situation propels the distribution rate to a historic summit of 54 %, against 49 % the previous year. “The dividends make it possible to attract saving shareholders who will be there for the long term and not just to speculate”,, affirm Christopher Dembik, economist at Pictet Asset Management.

This strategic choice, far from being harmless, marks a notable inflection in the way in which French companies intend to retain their capital.

Such a redistribution policy is particularly carried by certain sectors historically inclined to pay high dividends, without displaying strong growth prospects. These include banks, energy and communities services.

According to Nicolas Klapisz, partner at Ey and author of reportthe increase in the distribution rate in 2024 “Is mainly linked to banks that have paid more dividends last year thanks to their good results”. Among the characteristics of the current French model:

• So -called “mature” companies favoring reinvestment yield;
• An average dividend rate around 4 %, attractive for savers in search of stability;
• At least 15 CAC 40 companies are now considered as “Yield values”;
• This strategy which aims to compensate for the absence of rapid valuation, unlike technological values ​​or growth.

This positioning, widely assumed, gives the CAC 40 an image of a “refuge” financial center, but the choice to favor redistribution to the detriment of the investment already triggers the first criticisms, in particular in a context of accelerated innovation.

A French model against international market logics

Unlike French companies, US S&P 500 companies adopt a radically different strategy. According to Goldman Sachs, the distribution rate expected for the American index will not exceed 30 % this year.

If the shareholders are just as pampered across the Atlantic, it is by other levers, in particular the acquisitions of action. As Christopher Dembik underlines again, “They go more through action buybacks. It is therefore a different strategy, but which leads to the same result to satisfy the shareholders ”.

This approach offers the advantage of mechanically supporting the course of action while maintaining financial flexibility, unlike dividends that weigh directly on reserves.

Such a strategic divergence challenges the medium -term competitiveness of CAC 40 companies. By favoring a rigid distribution policy in a context of decreasing benefits, they are exposed to a weakening of their investment capacity, at a time when the energy transition, digitization or even innovation require massive capital.

Especially since in a world where alternative yield products explode, whether it is Stoking Crypto, 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, although reassuring in the short term for traditional shareholders, could come up against the limits of a publicly changing financial world. Faced with more agile international competition, and the rise of alternative retribution models, a redefinition of priorities will probably be required. The question is no longer only to seduce the classic saver, but to meet the rapid evolution of investors' expectations in an increasingly turned world towards programmable and decentralized finance.