Global Dividends Hit Record High Despite Economic Slowdown

 The world’s largest listed companies paid out a record $326.7 billion in dividends in the first quarter of 2023, up 12% from a year ago, according to a study by Janus Henderson. This was despite the signs of a global economic slowdown and rising inflation.

The study attributed the strong dividend growth to the robust profits of 2022, especially in sectors such as banking and energy, as well as the large amount of special dividends paid by some companies. For example, shipping giant Maersk distributed $11.7 billion to its shareholders after an extraordinary year for the industry, making it the world’s top dividend payer in the quarter. Volkswagen also paid out $6.3 billion following the initial public offering of its luxury car brand Porsche.

Continental Europe led the dividend growth with a 36% increase compared to the first quarter of 2022, followed by Japan with a 17.7% increase and North America with an 8.6% increase. The only region that saw a decline was Asia Pacific ex Japan, where dividends fell by 2.9% due to lower payouts by mining companies.

Janus Henderson said that the dividend momentum was likely to continue for the rest of the year, given the strength of corporate results and the recovery from the pandemic. However, it also warned that growth would slow down as inflation, higher financing costs and weakening economic conditions in some regions would inevitably impact shareholder returns.

“After two strong years, almost all of the easy gains from the post-pandemic rebound have been realized,” said Ben Lofthouse, head of the research team at Janus Henderson. He added that the management company had raised its forecast for total dividends for 2023 to $1.64 trillion, up 5.2% from 2022.

Reference

• Companies Spend Record Amounts on Dividends, Despite Looming Downturn | The Wall Street Journal | May 25, 2023
• Companies Pay Record Dividends in 2022 Despite Dismal Year | Investopedia | May 23, 2023
• Dividend payouts hit record high despite pandemic | Financial Times | May 24, 2023