Australian investors depend on bank dividends more than comparable countries and should consider global diversification.
The big banks in Australia may be considered a good option if investors are seeking generous dividends, but exposure to just one sector could be risky.
The latest analysis of dividends from major companies around the world, conducted by global asset manager Henderson Global Investors, says Australia's banks generate over two fifths of the country's total dividends.
Consequently, Australian investors depend far more on dividends from banks than any comparable country.
Henderson said the banking sector again dominated dividend payments in the third quarter of calendar 2015, with ANZ, Westpac, and NAB all making large payments, each up in Australian dollar terms.
"The Australian banking industry is continuing to be very generous with its dividends, despite some of them raising large amounts of capital to bolster their balance sheets in response to Australian Prudential Regulation Authority concerns about risks in the mortgage market," the Henderson analysis said.
Head of global equity income Alex Crooke said heavy dependence on bank dividends left Australian investors with a large exposure to just one sector.
"Many Australian banks are judged by the regulator to have too little capital, so paying large dividends at a time when they are issuing new shares in the market is a rather expensive and senseless exercise," Mr Crooke said.
"For Australians more than most, thinking global would help diversify these risks away."
Henderson said that in Australian-dollar terms, the dividends paid by Australian companies rose by 12.4 per cent compared to the September quarter in 2014.
But when converted to US dollars, Australian dividends fell 3.1 per cent to $US17 billion, reflecting the weakening Australian dollar.
Henderson said Australia sees a seasonal dividend peak in the third quarter.
Dividends generated by Australian companies comprise one third of the payments in the Asia-Pacific region, excluding Japan.
Henderson analyses dividends paid by the 1,200 largest firms by market capitalisation. Dividends are converted to US dollars.
Globally, dividends rose by 2.3 per cent to $US297 billion in the third quarter, year-on-year, following three consecutive quarters of declines.
Henderson said the lift was due to rapid growth in the US and special payment from Kraft on its merger with Heinz.
Stripping out exchange rate movements, global dividends grew by nine per cent - in line with the first half of the year.
In the US dividends soared by 23.4 per cent, with the $US9.8 billion special payment by Kraft accounting for almost half the increase.
Dividends from China fell by 2.1 per cent.
Henderson said dividends from China are set to fall in 2015 for the first year on record, reflecting the impact of China's economic slowdown on profits and payouts.