Global dividends hit record $1.66trn in 2023, report shows

Global dividends are on course to beat a record $1.66 trillion reached last year, according to a report by Janus Henderson Group, after a raft of companies, including Saudi Aramco and Porsche, promised to increase payouts in 2024.

Dividends increased 5% in 2023, a third consecutive record high following a brief decline in payouts during the pandemic in 2020, according to the report.

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The fund manager expects total dividends to hit a fresh high of $1.72 trillion this year, up 3.9% on a headline basis.

The payments suggest balance sheets are resilient, despite a global economic downturn and higher debt-servicing costs. It’s also an indication of the benefits to the banking sector of higher interest rates.

Almost half the dividend growth last year came from banks, which rewarded shareholders following a surge in profit from lending.

“Corporate cash flow in most sectors remained strong and this provided plenty of firepower,” said Ben Lofthouse, head of global equity income at Janus Henderson.

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Large cuts from just five companies reduced the global underlying growth rate by 2 percentage points in 2023, masking the broad-based growth in many parts of the world, according to the report.

Europe was a “key engine of growth” with record payouts up by 10.4% year-on-year on an underlying basis, while globally, 86% of companies either increased dividends or held them steady, the analysts wrote.

Read/listen: Simon’s weekly wrap: High interest rates hindering growth?

© 2024 Bloomberg

Roy Walsh

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