The latest Global Dividend Index from Janus Henderson reveals a marginal decrease in global dividends, down 0.9% to $421.9 billion in the third quarter.
However, underlying growth stood at 0.3%, indicating more robust performance when considering various factors like special dividends and exchange rates. This decline is primarily attributed to significant cuts in the mining sector and from major oil producers in Brazil and Taiwan.
The report highlights that if the two largest dividend cutters – Brazil’s Petrobras and Australia’s BHP – were excluded, the underlying global growth would have been 5.3%. This figure aligns more closely with the long-term trend.
The mining sector, in particular, saw significant reductions, with half of the companies lowering their payouts. This contrasted with strong dividend growth in the banking, utilities and vehicle manufacturing sectors.
In the UK, the decline in mining dividends was offset by strong growth in banks, oil companies and utilities, leading to a 1.5% rise in UK payouts on an underlying basis. Europe continued its strong growth trajectory from the second quarter, with dividends jumping 22.9% on an underlying basis, setting the stage for a record year in distributions.
The US displayed slower yet robust growth at 4.5%, with 98% of companies either raising or maintaining their dividends. In contrast, China reached a new record in dividends, driven largely by a significant increase from PetroChina, despite weaknesses in the banking and property sectors.
Emerging markets showed a mixed performance, with strong contributions from China, India, Saudi Arabia and Czechia, but overall declines due to weaknesses in Brazil.
Janus Henderson has slightly revised its end-of-year forecast, decreasing the headline forecast from $1.64 trillion to $1.63 trillion due to lower special dividends and the impact of a stronger dollar. However, underlying growth forecasts have been upgraded from 5.0% to 5.3%, reflecting a more optimistic outlook on the resilience of global dividends.
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