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Global dividends swell to record levels, with more growth to come

Published 2024-03-13, 04:44 a/m
© Reuters.  Global dividends swell to record levels, with more growth to come
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Proactive Investors - Global dividends swelled 5% to new record levels last year and are expected to continue growing in 2024.

Last year's total reached $1.66 trillion (£1.3 trillion) thanks to strong bank payouts on the back of higher interest rates in the US, UK and China, while reforms in Japan also fed through to provide a boost.

US tech giants Microsoft and Apple provided the largest payouts.

The quarterly Janus Henderson dividend report showed 86% of the world’s 1,200 biggest public companies increased their dividends or kept them steady in their most recent reporting period, while Japan was a major contributor as companies started returning more capital to shareholders and 91% either raising or maintaining payouts.

Microsoft Corporation (NASDAQ:MSFT) was the top payer for the first time since 2020, with Apple Inc (NASDAQ:AAPL, ETR:APC) in second and Exxon Mobil Corp (NYSE:NYSE:XOM, ETR:XONA) in third. Three Chinese companies were in the top 10- China Construction Bank, PetroChina and China Mobile.

BHP Group Ltd (LSE:BHP, ASX:BHP) fell to sixth from top position the previous year, part of a trend with miners cutting payouts.

In the final quarter of 2023 underlying dividends grew 7.2%.

“Pessimism over the global economy proved ill-founded in 2023 and although the outlook is uncertain, dividends are well supported,” said Ben Lofthouse, head of global equity income at Janus Henderson.

"Corporate cash flow in most sectors has remained strong and is providing plenty of firepower for dividends and share buybacks."

Janus Henderson forecasts dividends of $1.72 trillion for 2024, up 3.9% on a headline basis and equivalent to underlying growth of 5.0% as ordinary dividends grow but special payouts decrease.

The run-rate of dividend growth from US stocks in the fourth quarter "bodes well" for 2024, Lofthouse said, with Japanese companies also now embarking on a process of returning more capital to shareholders.

As well as special dividends, the underlying growth rate also takes account of currency swings, tweaks to dividend calendars and the index.

Read more on Proactive Investors CA

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