Global dividends hit record of $1.25 trillion in 2017, more to come

MILAN: Global dividends rose 7.7 percent to an all-time high of $1.25 trillion (£891 billion) last year boosted by a buoyant world economy and rising corporate confidence, Janus Henderson said on Monday, predicting another record year ahead.

The surge – the strongest since 2014 – was driven by increases in every region and almost every industry with record showings in 11 countries including the United States, Japan, Switzerland, Hong Kong, Taiwan and the Netherlands, the investment manager added.

For 2018 Janus Henderson expects dividends to keep the same 7.7 percent growth rate to reach around $1.35 trillion, as corporate and economic growth remains strong even in more volatile financial markets.

“Companies are seeing rising profits and healthy cash flows, and that’s enabling them to fund generous dividends. The record payout last year was almost three-quarters higher than in 2009, and there is more to come,” Ben Lofthouse, Director of Global Equity Income at Janus Henderson, said.

“The next few months are set fair, and we expect global dividends to break new records in 2018.”

Royal Dutch Shell kept its position as the world’s biggest dividend payer. China Mobile rose to second from 19th last year and was followed by Exxon Mobile, Apple and Microsoft, the report said.

The top 20 payers accounted for 15.7 percent of the total payout.

Adjusting for movements in exchange rates, special one-off dividends and other factors, global dividends rose 6.8 percent last year and are expected to rise another 6.1 percent in 2018.

Janus said 2017’s dividend growth showed less regional divergence than in previous years, reflecting the broadly based global economic recovery, though Europe lagged behind.

European dividends rose just 1.9 percent to $227 billion, weighed down by cuts from a handful of large companies in France and Spain, lower special dividends and a weak euro during the second quarter, when most dividends are paid, it said.

In the UK, headline growth was held back at 3 percent by the weak pound, but underlying growth was 10 percent as UK-listed multinational mining companies rapidly restored dividends that had been cut during the lean years for commodity prices.

The Asia Pacific region posted the strongest headline growth rate of 18.8 percent to 139.9 billion, followed by Emerging Markets, up 16.5 percent to $102.4 billion, while dividends in North America grew 6.9 percent to a record of $475.6 billion.

Janus said every industry saw higher underlying dividends in 2017 except telecoms, which was flat. The mining industry saw by far the fastest growth, up 27.2 percent on an underlying basis.