Dividend momentum builds as record year expected


17 Jun 2024

Despite economic uncertainty, corporates are set to pay record dividends this year.

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Despite economic uncertainty, corporates are set to pay record dividends this year.

Investors are set to pocket more corporate earnings this year than ever before after a strong first quarter cemented expectations.

Boardrooms around the globe collectively handed $339.2bn (£266.3bn) back to their shareholders in the opening three months of the year – an underlying 6.8% jump in 12 months.

Such an improvement was expected and therefore supports Janus Henderson’s forecast of investors receiving $1.72trn (£1.3trn) in dividends this year. This would be a 3.9% headline improvement on 2023’s cash returns, equivalent to underlying growth of 5%.

Another positive sign despite the economic and geopolitical uncertainty is that first quarter payouts were 51% larger than in the same period in 2017.

We may have witnessed a 2.4% headline improvement on the same period a year earlier with 93% of companies increasing their payouts or holding them steady, but the level of growth fell six-fold. Indeed, a year earlier dividends grew by 12.5%.

Lower special dividends have been blamed and were expected. Such payments totalled $19.5bn (£15.3bn), down from $32.5bn (£25.5bn) during the same period last year. Volkswagen’s sale of Porsche was one reason why one-off payments were higher last year, while we also saw the end of Moller Maersk’s special dividends.

In the first quarter of this year, banks accounted for a quarter of global growth and 60% of payments came from North America, or $164.3bn (£128.9bn), which was a 7% rise on an underlying basis. The UK contributed 5% of the total.

Tech giants Meta ($1.1bn) and Alibaba paid their first dividend during the period, which added more than 1% to the total. Disney also recommended its first dividend since the pandemic.

Janus Henderson said that the “broad picture is one of continued dividend resilience”. This is especially evident in Europe, the US and Canada.

One point of interest is that payments in Europe bucked the growth trend to drop slightly to $45.8bn (£35.9bn) from $46.7bn (£36.6bn). Janus Henderson blamed this on lower special dividends and “seasonal factors”.


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