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Global dividends hit first-quarter record

Written by: Paloma Kubiak
Global dividends reached $244.7bn in the first three months of the year, and are expected to set a new record for 2018.

The $244.7bn figure is a record for first-quarter payouts, according to the latest Janus Henderson Global Dividend Index.

The figure jumped 10.2% on a headline basis to £182bn (sterling equivalent) and exceeded expectations due to the weaker dollar.

Asia Pacific ex Japan was the only region to see falling dividends (down 3.1%), but Janus said the dip is likely to prove temporary as the headline total was hit sharply by lower special dividends, and cuts in Australia.

The first quarter figures revealed that North America was the standout performer with almost every company making regular quarterly payments to investors. Eight in 10 US companies paid out more dividends year-on-year, with technology, financials and healthcare doing the best. US underlying growth was 7.6%, with the total paid reaching an all-time quarterly record of $113bn.

As a result, Janus said all-time quarterly records were broken in the US and Canada, with the latter seeing underlying growth of 13.8% – the fastest in the developed world – with every company in the dividend raising or maintaining payouts.

European dividends for Q1 were held back by slow growth in Swiss pharmaceutical stocks and oil companies so underlying growth came in at 3.9%. However, this figure was pushed to a headline rate of 13.7% because of stronger European exchange rates.

Janus forecasts that 2018 is set to see global dividend growth of 6% in underlying terms and 8.5% headline growth, helped by the weaker dollar. Payments are expected to reach a record $1.358trn, $10bn more than its initial expectations given in January.

Ben Lofthouse, director of global equity income at Janus Henderson, said: “2018 has started well for dividends. Economic growth is strong, and corporate profitability is rising, generating cash that companies can return to their shareholders. The Q1 acceleration in US dividend growth may be an early sign that companies are feeling confident about returning some of the cash they have accumulated to shareholders. Recent US corporate tax reforms could encourage this trend.

“The second quarter is seasonally important for European dividend payments and we will see a much broader range of industries and countries contributing than in Q1. Europe’s economic recovery is likely to yield healthy growth from across the region. Stock-specific problems in Australia made a greater impact on Q1 than they will on the full year, and we are optimistic for emerging markets and Asia too.

“We’re confident investors will get to celebrate a new record for global dividends in 2018.”

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