ADX, FTSE roll out high-dividend index: The Abu Dhabi Securities Exchange (ADX) launched an index focused on high-dividend stocks, named the FTSE ADX Dividend Stars Index, according to an ADX disclosure (pdf). The index provides exposure to 17 ADX-listed companies with high and consistent dividend payouts.

The companies in focus: The initial 17 constituents operate in the communication services, industrials, energy, financials, consumer staples, and basic materials industries sectors, and are included in the index thanks to strong financial performance and diversified, international operations. They accounted for over 70% of all dividends listed on the ADX so far this year, and saw a collective 20% growth in 9M net income y-o-y.

DATA POINT- ADX-listed firms have paid out more than AED 320 bn in dividends since 2020 – marking a compound annual growth rate (CAGR) of almost 33%.

The index will likely include the likes of Adnoc Drilling, who recently raised its dividend distribution floor to AED 25 bn by 2030, Adnoc Gas, Adnoc Distribution, Fertiglobe, and e&.

REMEMBER- The six Abu Dhabi National Oil Company (Adnoc)-listed subsidiaries — Adnoc Gas, Adnoc Drilling, Adnoc Distribution, Adnoc Logistics & Services (L&S), Fertiglobe, and Borouge — have pledged to pay out AED 158 bn (USD 43 bn) in dividends through 2030, nearly doubling the distributions made since the first Adnoc unit IPOed in 2017

The new index uses the FTSE’s Target Diversification method to allow easy adjusting of stock concentrations to help reduce volatility while maintaining exposure to high-dividend paying stocks.

ICYMI- This is the fifth index launched by the ADX and FTSE Russell, with the two launching indices like the Shariah-compliant FTSE ADX 15 Islamic Index last year and the FTSE ADX ESG Screened index in 2023.

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