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Global dividends reach record high, driven by the US

Cherry Reynard
Written By:
Cherry Reynard
Posted:
Updated:
19/02/2015

Company dividends rose 10.5 per cent year on year in 2014 to reach a record high of $1.167trn, according to the Henderson Global Dividend index.

However, the total is 1.3 per cent lower than the group originally forecast, mainly influenced by a surge in the US dollar in the fourth quarter of the year, which knocked $10.9bn off the total, as dividends earned around the world were translated at lower exchange rates. The total was also boosted by Vodafone’s one-off payout in the first quarter, following the divestment of Verizon.

The long term case for investing in global dividend generating companies is sound: Henderson points out that dividends have grown nearly 60 per cent since 2009.
The US was the main engine of global dividend growth in 2014, with US dividends up 17 per cent at $355.3bn. Emerging markets were weak overall, with dividends falling 11.7 per cent, largely due to lower special dividends, currency depreciation and index changes. However, certain areas were notably stronger than others: China saw headline growth, for example, while Russian payouts halved.

The UK saw record dividend growth for the year, but this was largely attributable to the Vodafone special dividend and overall, underlying dividends fell slightly due to the strong pound. The mining sector was particularly weak, while technology and consumer discretionary companies did well.

Henderson has reduced its forecast for 2015 dividends due to the sharply higher dollar and sharply lower oil price. It estimates that total dividends will be $1,176, up 0.8 per cent year on year.


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