Global dividend pay-outs from large corporations fell 22% (19.3% underlying) to $382.2 billion (€323 billion) in the second quarter of this year: the worst quarterly drop in eight years.
According to Janus Henderson’s Global Dividend Index, more than a quarter (27%) of Q2 payers cut their dividends, with more than half of this group cancelling them outright.
Nevertheless the impact of Covid-19 varied enormously around the world and across different industries, the report said.
The best case now suggests global pay-outs will fall 19% on an underlying basis this year to $1.18 trillion.
The worst case scenario suggests global pay-outs could fall 25% this year on an underlying basis, dropping to $1.10 trillion.
All regions saw lower pay-outs except North America, where Canadian payments proved to be resilient. Europe and the UK were the worst affected regions.
Healthcare and communications dividends proved resistant to cuts, but financials and consumer discretionary pay-outs fell sharply.
Jane Shoemake, investment director for global equity income at Janus Henderson, said: “Most European companies pay just once a year in the second quarter, so a dividend cancellation has a disproportionately large impact on the annual total, but it also means 2021 should show a rebound in Europe.
“For the UK, the rebound will be smaller as several companies, not least oil giants Shell and BP, have taken the opportunity to reset their pay-outs at a lower level.”
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