The evolving relation between dividends and flexible payouts: A different evolution

We study payout by U.K. listed companies during 1993-2018. Regular dividends remain the dominant channel; they are not disappearing, nor becoming less flexible. At the same time, payments of special dividends and especially repurchases have grown, and these methods make total payout substantially more flexible and more sensitive to earnings than regular dividends on their own. We find that flexible methods augment rather than replace regular dividends. The role of regular and special dividends remains larger in the U.K. than in the U.S., and the role of repurchases is smaller.