Listed companies across the world could return a record amount of cash to investors in 2019, one market watcher predicts.
But the expected rate of dividend growth highlights Janus Henderson’s concerns that equities are in for a tough year.
Global companies could pay around $1.41trn (£1trn) in dividends for 2019, the asset manager says. This is 5.1% improvement on the $1.37trn that was handed back to shareholders in 2018, on an underlying basis.
Dividends grew 8.5% last year to record their best performance since 2015.
This was fuelled by almost nine in 10 companies increasing or maintaining their dividend payments.
Expectations of lower growth put the dividend forecast for this calendar year within the 5% to 7% long-term average.
Dividends normalising in mining, energy and bank stocks after periods of low or no payments was a factor in 2018’s growth. As were increasing payouts by tech stocks and the impact of tax cuts in the US.
Downward revisions of economic projections around the world have influenced Janus Henderson’s forecast for lower dividend growth.
Janus Henderson’s head of global equity income, Ben Lofthouse, said that despite global economic forecasts being revised down, most observers still expect companies to deliver positive earnings growth in 2019.
“Dividends in any case are much less volatile than earnings, so we remain optimistic on the prospects for income investors,” he added.