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Global dividends continue to climb

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Good news for those looking for an income from their investments, as a report from fund giant Janus Henderson says that dividends across the globe will continue to grow in 2018.

The group, which releases its Dividend index monthly, said last year’s record $1.25 trillion paid out in dividends globally is likely to be eclipsed this year. It expects payouts to reach $1.35 trillion if the dollar stays at its current level. Dividends have risen by almost 75% since 2009.

The tax cuts in the US are likely to accelerate payouts, with companies having more cash left over to hand out to shareholders.

Asia was the stand-out region for dividend hunters with dividends rising 18.8% over last year. Dividends in Hong Kong, South Korea and Taiwan all hit new highs. Hong Kong’s China Mobile is now the second largest dividend payer in the world, after Shell.

Changes to the corporate governance rules in Japan have seen dividends rise by 40% since 2014. Some of its major companies – such as Mitsubishi and KDDI – have seen double-digit rises.

The US was also strong, with dividends rising 5.8% year-on-year. The banking sector was particularly strong. The largest sector, healthcare, saw its fourth consecutive year of growth.

The UK saw underlying growth of 10% in dividend payouts, though the recovery in sterling pushed headline growth lower. Mining companies started paying dividends again, after a period of consolidation, which helped the overall figure. Janus Henderson said financials, particularly the banks, are likely to hike dividend payments this year.

European companies were the weakest area, with underlying growth of just 2.7%. In spite of a rapidly improving economic backdrop – the Eurozone is seeing its fastest growth rate in a decade – dividends were hit by cuts from a number of larger companies in France and Spain.

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