Global dividends break new record in 2019

Global dividends broke a new Q2 record in 2019, even as the rate of growth reached its lowest level for more than two years, according to Janus Henderson Investors’ Global Dividend Index

Global dividends broke a new Q2 record in 2019, despite the underlying rate of growth slowing to its lowest level for more than two years amid a global economic deceleration, according to Janus Henderson Investors’ Global Dividend Index.

Dividend payments from listed companies reached $513.8bn in Q2 – 1.1% higher than the same period in 2018 in headline terms – with a growth rate of 4.6% on an underlying basis, the firm said.

While the underlying rate of growth was at a two-year low, it was only slightly below the long-run average and in line with Janus Henderson’s forecasts, the report added.

Janus Henderson left its forecast for full-year 2019 dividends unchanged at $1.43trn.

Head of global equity income at Janus Henderson, Ben Lofthouse said the slowdown was “not a cause for concern”, particularly as “global dividends have been growing very quickly over the last two years”.

The pullback did not stop the Janus Henderson Investors Global Dividend Index reaching a record high of 191.0, meaning global dividends have almost doubled since the index began in 2009.

Lofthouse, who manages the Janus Henderson Global Equity Income fund, said that at this stage in the economic cycle, there is a moderation of dividend increases across a broad range of companies, and the number of cuts is on the rise too.

He said the impact of the global economic slowdown is greater in some parts of the world than others, with Europe seeing a particular impact. But this is why taking a global approach to income investing is so valuable – the regional and sector diversification brings significant benefits to investors.

The growth in returns to shareholders was helped by record payouts from companies in Japan, Canada, France and Indonesia, while emerging markets was the region that saw the fastest growth thanks to higher figures in Russia and Colombia.

US dividends grew at their slowest rate in two years, up 5.3% on an underlying basis to $121.7bn.

The slowdown was broad-based with most sectors seeing only single-digit growth.

Banks continue to show strong increases, but dividends from auto manufacturers were flat.

In the UK, dividend growth was in line with the global average at 5.3%, helped largely by a special dividend from miner Rio Tinto, with the banking sector also boosting growth.

Growth in both Europe and Asia Pacific was much slower, at 2.6% and 2.2% respectively on an underlying basis.

European dividends also fell 5.3% on a headline basis due to a weak euro.