The report by British asset manager Janus Henderson reveals that global dividend payouts to shareholders reached a new peak in 2023, hitting $1.66 trillion. This represents a 5% increase year-on-year, with the fourth quarter showing a significant 7.2% rise from the previous three months. The adjustment for exchange rates, one-off special dividends, and technical factors provides a clearer picture of the actual growth in dividends.
Impact of Banking Sector
The banking sector played a pivotal role in driving the world’s total dividend growth, accounting for almost half of the increase. High interest rates contributed to record payouts as lenders’ margins improved. Major banks like JPMorgan Chase, Wells Fargo, and Morgan Stanley announced plans to raise their quarterly dividends after passing the Federal Reserve’s stress test. However, the report highlights that dividend cuts from the mining sector offset some of the positive impact from banking dividends.
Emerging market banks, excluding those in China, made a significant contribution to the increase in dividend payouts. While Europe was described as a “key engine of growth,” with a 10.4% rise in payouts year-on-year, some major companies such as BHP, Petrobras, Rio Tinto, Intel, and AT&T implemented large dividend cuts. Despite this, 86% of listed companies worldwide either increased dividends or maintained them at current levels in 2023. A total of 22 countries, including the U.S., France, Germany, Italy, Canada, Mexico, and Indonesia, witnessed record payouts last year.
Looking ahead to 2024, Janus Henderson expects total dividends to reach $1.72 trillion, reflecting a 5% underlying growth rate. While the report acknowledges the challenges posed by dividend cuts in the mining sector, it remains optimistic about the overall growth trajectory in dividend payouts globally.
The analysis of global dividend payouts in 2023 reveals a mixed picture of growth and challenges across different sectors and regions. While the banking sector and emerging markets made significant contributions to the increase in dividends, cuts from the mining sector tempered the overall growth rate. Despite these challenges, many listed companies around the world managed to maintain or increase their dividend payouts, reflecting a resilient global dividend landscape. Looking ahead, the outlook for 2024 remains positive, with expectations of continued growth in total dividends, albeit at a moderate pace.
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