Russia's largest non-financial companies paid RUB1.69 trillion ($26.7bn) in dividends for 2017, up by 16% year-on-year and making an average payout of 38% of net profit as compared to 31% for 2016, Vedomosti daily said on July 31 citing the estimates of the Analytic Credit Rating Agency (ACRA).

In June bne IntelliNews reported that Russian stocks are paying the highest dividend yields in the world with an average yield of 5.5%, and the stocks of the most generous companies handsomely outperform the leading indices. With peak payout season nearly on us investors are shopping for the bargains.

Notably, most of the increase came from the oil and gas sector, with biggest names paying RUB700bn for 2017 in dividends, or up by 24% y/y.

While state-controlled companies increased their dividend payments notably, with 19% y/y hike to RUB697bn, the payout amounted to 35% of average profit, below the demand of the Finance Ministry to pay 50% of the IFRS bottom line. The state budget got RUB270bn from the dividends paid by state-controlled companies.

Oil and gas amounted for 42% of all dividends, followed by metals and mining (27% of total or RUB455bn, paying out almost entire free cash flow), transportation companies (8% of total or RUB139bn), and telecom and utilities (7% and 6% of total, respectively).

The calculations of ACRA were based on 277 largest Russian companies with a total share of 35% in all corporate revenues in 2017 (RUB49 trillion).