Today’s News
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In 2023, corporate dividends worldwide surged to an unprecedented USD 1.66 trillion, with banks leading the charge, contributing significantly to this growth, a report unveiled on Wednesday. According to the quarterly Janus Henderson Global Dividend Index (JHGDI) report, 86% of listed companies globally either increased dividends or maintained them, projecting a new dividend record of USD 1.72 trillion for this year.
Microsoft, Apple, and Exxon Mobil emerged as the top dividend payers in 2023. The total value of corporate dividends rose from USD 1.57 trillion in 2022, with underlying growth of 5%, according to U.K. asset manager Janus Henderson. Ben Lofthouse, head of global equity income at Janus Henderson, emphasized the robust cash flow across various sectors, fueling dividends and share buybacks.
High interest rates bolstered bank margins, resulting in a record USD 220 billion payout to shareholders in 2023, marking a 15% underlying increase from the previous year. However, this positive momentum was offset by substantial cuts from the mining sector, attributed to lower commodity prices denting mining profits.
Five prominent companies, including BHP, Rio Tinto, Petrobras, Intel, and AT&T, implemented hefty dividend cuts, reducing the underlying 2023 global dividend growth rate by 2 percentage points. Despite this setback, the report noted that “Beyond these two sectors (banking and mining), whose impact was unusually large, we saw encouraging growth from industries as varied as vehicles, utilities, software, food and engineering, demonstrating the importance of a diversified portfolio”.
Geographically, Europe (excluding the U.K.) emerged as a significant growth driver, contributing two-fifths of the global increase in dividends, while Japan also made a substantial contribution despite a weak yen. Although the United States played a pivotal role in global dividend growth, its 5.1% growth rate aligned with the global average. Emerging markets dividends remained flat on an underlying basis, with steep cuts in Brazil and lackluster growth in China.
Janus Henderson anticipates another 5% growth in corporate dividends this year, reaching USD 1.72 trillion. Despite expectations for a slowdown in bank dividend increases, rapid declines from the mining sector might have a less significant impact. Lofthouse emphasized the resilience of energy prices, suggesting strong support for oil dividends, while defensive sectors like healthcare, food, and basic consumer goods are poised for steady progress.
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