Global dividends rise to new record in Q2

Issuer / Publisher: Janus Henderson Investors / Key word(s): Dividend/Study

Janus Henderson Investors: Global dividends rise to new record in Q2

September 10, 2024 / 8:39 a.m. CET/CEST
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Global dividends rise to new record in Q2

• Global dividends rose to a record $606.1 billion, an adjusted increase of 8.2%
• Overall growth of 5.8% was impacted by the weak yen
• 92% of companies worldwide increased their dividends or kept them constant
• Europe dominated the second quarter and recorded 7.7% more distributions than in the previous year
• Record values ​​in France, Italy, Switzerland and Spain
• One third of the year-on-year dividend growth was attributable to banks
• 2024 guidance raised to $1.74 billion – an adjusted increase of 6.4% year-on-year (previously 5.0%)
• Overall growth is expected to be 4.7% (previously 3.9%)

According to the latest Janus Henderson Global Dividend Index, dividend investors experienced a very strong second quarter of 2024. Total distributions rose 5.8% to reach a new record of $606.1 billion. Adjusting for the impact of exchange rates, particularly the weak Japanese yen, adjusted growth was even higher at 8.2%.

The introduction of dividend payouts by large US companies, including Meta and Alphabet, boosted the global growth rate by 1.1 percentage points in Q2. Growth remained broad-based – 92% of companies worldwide increased their dividends or kept them constant. In addition, a third of sectors had double-digit adjusted growth and only three sectors saw dividends decline.

The second quarter marks Europe’s seasonal peak. The total of 204.6 billion US dollars represents a new record for the region, up 7.7% year-on-year. France, Italy, Switzerland and Spain all reported record dividends. More than half of the dividend growth came from banks, which were supported by the interest rate environment.

“Germany, however, stood out negatively with a 1.2% decline in dividends on an adjusted basis. Bayer had the biggest impact on this result: The company cut its dividend by 95% to reduce debt from the 2016 acquisition of Monsanto. The dividend cut saved the company $2.5 billion this year. However, this was only to bring the dividend back to a normal level after the record payout in 2023, and entirely to continue receiving government subsidies,” explains Daniela Brogt, Head of Sales for Germany and Austria at Janus Henderson Investors.

The largest German dividend payer, Allianz, increased its dividend by a fifth, while Porsche more than doubled its payout. Overall, dividend payments in Germany amounted to 47.2 billion US dollars (43.8 billion euros) – nine out of ten German companies increased their dividends or kept them constant.

In the US, dividends rose by 8.6% – two-fifths of this increase was due to the first dividend payments from Meta and Alphabet.

The second quarter is also seasonally important in Japan – payouts rose by a seventh on an adjusted basis and reached a new yen record. However, the weak exchange rate meant that previous US dollar highs were not exceeded. The largest contributor to growth came from Toyota Motor, Japan’s largest dividend payer, which made one of the largest increases after a record profit in the last fiscal year. In Hong Kong, payouts were unchanged, while in Australia they fell significantly due to a cut by Woodside Energy. Singapore, Taiwan and South Korea all posted double-digit increases.

Banks were once again the main driver of higher payouts, accounting for a third of the adjusted year-on-year increase. European banks were the largest contributors, although the trend was seen globally. Insurers, automakers (particularly in Japan) and telecommunications companies also contributed significantly to growth in the second quarter.

Following a strong second quarter, and noting the significant contribution that new dividend payers could make this year, Janus Henderson increased its forecast for dividends in 2024. Janus Henderson now expects companies worldwide to pay out a record $1.74 billion, representing an adjusted increase of 6.4% from 2023 (up from 5.0% in the first quarter report) and a total increase of 4.7% (up from 3.9%).

Jane Shoemake, Client Portfolio Manager in the Global Equity Income Team at Janus Henderson, says: “Our expectations for the second quarter were optimistic. Thanks to the strength of Europe, the US, Canada and Japan, the result even exceeded our forecasts. Global economies have generally coped well with the burden of higher interest rates. Inflation has slowed, while companies have also proven resilient and continue to invest in the banking sector, which has led to higher profits and generated a lot of money for dividends.

The introduction of dividends by major US media and technology companies Meta and Alphabet, as well as China’s Alibaba, is a very positive signal that will increase global dividend growth by 1.1 percentage points this year. These companies are following a path that has been typical for growth industries over the past few centuries: they have reached a point where dividends are a logical consequence for returning excess liquidity to their shareholders. In doing so, they have proved wrong skeptics who claim that this group of companies is different. The stock market simply evolves over time, industries grow and soften – depending on the changing needs of society. Dividend payments will also increase the attractiveness for investors for whom distributions are an important part of their investment strategy. This could also encourage other companies to follow suit.

-End-

Press inquiries

Heidi Rauen +49 69 33 99 78 13 – [email protected]

Silke Tschorn +49 69 33 99 78 17 – [email protected]

Notes for editors
Our overall growth rate describes the change in the total dollar amount paid by companies compared to the corresponding quarter of each year. Our adjusted figure takes into account the distortions that can be caused by one-off special dividends, changes in exchange rates, the impact of companies moving in and out of the world’s top 1,200 companies that make up our index, and the impact of changes in distribution dates. The latter two factors are typically negligible on a global level over an entire year, but can have a larger impact in a particular quarter, region or sector.

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As of June 30, 2024, Janus Henderson manages assets of approximately $361 billion (approximately €337 billion) and has over 2,000 employees and offices in 24 cities worldwide. The company helps millions of people around the world to invest together in a better future. The London-based company is listed on the New York Stock Exchange (NYSE).

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