Janus Henderson Global Dividend Index data. The growth is mainly attributable to North America, emerging markets and Japan
February 17, 2020 In 2019, global dividends hit a new record of $ 1.430 billion, growing, according to the Janus Henderson Global Dividend Index , by 3.5%. The underlying growth rate, which takes into account the strengthening of the dollar, unusually high extraordinary dividends and other technical factors in 2019, was 5.4%. Italy is with Holland the European country to have registered
the biggest increase.
The growth is mainly attributable to North America, emerging markets and Japan. The United States, Canada, Japan, Russia and France have set new annual records.
However, due to the more difficult global economic scenario in 2019, the slowest growth rate since 2016 has been recorded. The Asia-Pacific region (excluding Japan), the United Kingdom and Europe (the United Kingdom have lagged behind the global average. excluding).
From a sectorial point of view, the most sustained growth is attributable to the oil sector, where dividends rose by 10%, while in the telecommunications sector distributions fell.
In Europe, Italy together with the Netherlands is the European country that reported the highest dividend growth, with growth of 6.0% and underlying growth of 8%. At sector level, there was an increase in distributions by companies in the transport sector and utilities, in the first case thanks to the acquisition by Atlantia of the Spanish Abertis, in the second case thanks to the strong increase in Enel and Terna.
For 2020, Janus Henderson expects overall growth to be slowed by the drop in extraordinary dividends, however dividends are expected to total $ 1,480 billion, an increase of 3.9% over 2019. In underlying terms, distributions are expected to increase by 4%.
Returning to 2019, the trend already recorded in the rest of the year continued in the fourth quarter, despite a slight slowdown in the growth rate in North America due to the drop in profits. Fourth quarter dividends rose 4.6% to a record $ 291.8 billion, which equates to an underlying increase of 4.8%.
In the past ten years dividends have grown tremendously, starting from the low levels of 2009 following the financial crisis. Distributions nearly doubled (+ 95% overall, + 97% underlying), meaning that income-oriented investors in 2019 received $ 694 billion more in dividends than ten years earlier. In addition, over the past decade, global corporations have paid an impressive sum to shareholders: $ 11.4 trillion in total. Dividends in North America have risen 136% in the past decade, second only to Japan, and have contributed half of the dividend growth in ten years.
In 2019, underlying distributions in the U.S. rose 6.8%, hitting a record high of $ 490.8 billion, though growth was slower in the second half of the year than in the first half of the year. The main growth factor was the increase in double-digit dividends by almost every banking institution. Dividends from American banks have doubled in the past five years only, a better result than any other sector.
Dividends in Canada in 2019 grew faster than other developed countries, up 9.5% in underlying terms to a record $ 43.8 billion, particularly thanks to the banking and energy sectors.
For Japan, it was the fifth consecutive year of record dividend growth on a global scale, while other countries in Asia were affected by the slowdown in global economic growth and the effects of tensions on the commercial front.
South Korea reported the worst result, while in Taiwan about 66% of companies cut the dividend.
Dividends in Australia fell by 3.3%, adjusted for the substantial extraordinary dividend of BHP and Rio Tinto. 20% of Australian companies cut dividends in 2019, and the banking sector seemed particularly vulnerable.
Singapore and Hong Kong have reported positive growth, although the number of companies that have reduced dividends has increased in Hong Kong.
In China, the strong increase in Petrochina led the total to rise by 4.4%, otherwise the Chinese dividends would have been stable and, as in Australia, with distributions unusually down by 20%. Overall, distributions in emerging markets have increased thanks to the sharp increase in distributions in Russia.
In the past ten years, dividends in Europe have grown more slowly than in other regions, although, being a higher-yielding region, there is less room for dividend growth. In 2019, European distributions fell by 2% to 251.4 billion dollars, however this is mainly due to the sharp devaluation of the euro against the US dollar. The underlying growth was 3.8%, slightly below the global average, with wide divergences between countries.
It should be noted that in Europe, France was the only European country to record record distributions, while Germany was the weakest among the large countries, but the tail light was Belgium since Anheuser Busch halved the distributions. In the United Kingdom, overall growth was boosted by the extraordinary dividends of Rio Tinto and BHP, while the underlying growth was only 2.9%, below the global average.
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