CAC 40 Defies Profit Slump with Record Shareholder Payouts in 2024

France's benchmark index is rewriting corporate playbooks. Despite a 12% drop in net profits among CAC 40 constituents, dividend payouts held firm at €73 billion—maintaining last year's record levels. The payout ratio surged to 54%, its highest in history, as companies prioritized shareholder returns over balance sheet fortification.

This counterintuitive strategy emerges amid stagnant growth and inflationary pressures. 'It's a calculated gamble to attract long-term capital,' notes EY's equity strategist Pierre Martin. The approach contrasts sharply with US peers, where S&P 500 firms allocated 78% of shareholder returns to buybacks last quarter.

Market observers question the sustainability as geopolitical risks mount. The index dipped below 6,900 points during Q2 earnings season, yet boards approved special dividends totaling €4.2 billion. 'When yields outperform fundamentals, you're either looking at extreme confidence or musical chairs,' warns Banque de France economist Claire Lefèvre.