Dividends hit new record in Q1
24 MAY, 2024
Janus Henderson launched a new edition of the Janus Henderson Global Dividend Index, highlighting that global dividends reached a record $339.2 billion in the first quarter.
Key takeaways
- Dividends amounted to a record $339.2 billion in the first quarter, reflecting an overall increase of 2.4%.
- Underlying growth was significantly higher (6.8%), but the total was affected by the decline in extraordinary dividends.
- Sweden and Canada broke records in the first quarter and the United States recorded an all-time high on a quarterly basis.
- Low growth in Switzerland and cutbacks in Denmark held back Europe (excl. UK), but the region is on track for an encouraging second quarter.
- Japan continued to post strong growth, although the dollar total was held back by the weak yen.
- Banks accounted for a quarter of global growth in the first quarter, up 12.0%; with sectors showing some growth.
- Janus Henderson's dividend forecast for 2024 remains unchanged at $1.72 trillion, up 3.9% year-on-year overall; this corresponds to underlying growth of 5.0%.
Global dividends reached a record $339.2 billion in the first quarter, according to the latest Janus Henderson Global Dividend Index. Strong underlying growth of 6.8% was the main driver of the advance, although the overall total rose more slowly (2.4%) due to lower extraordinary dividend payouts. Nevertheless, special dividends remained relatively high compared to most previous first quarters: this year's decline was simply due to the exceptionally high base for the first quarter of 2023, influenced by only two companies.
Globally, 93% of companies paying dividends in the first quarter increased their dividends or kept them intact.
The first quarter is seasonally quiet in many parts of the world, but records were broken in Sweden and Canada, while US distributions set an all-time high. Two very large companies, Meta and Alibaba, paid their first ever dividends and boosted the global first quarter total by 1.2 percentage points.
United States: a historic quarter
Dividend growth in the US accelerated in the first quarter, when it reached a quarterly record of $164.3 billion, up 7.0% in underlying terms. Walt Disney's reinstatement of shareholder payouts after the pandemic and first quarter dividends from Meta and T-Mobile were mainly responsible for the acceleration in US payouts.
Europe: on track to post an encouraging second quarter
Despite low Swiss growth and cutbacks in Denmark, which have held back Europe (excl. UK), the region is on track for an encouraging second quarter.
The first quarter is seasonally quiet in Europe and dominated by Switzerland, where payouts fell in Swiss franc terms: many Swiss companies in the index increased their dividend per share, but very large share buybacks (e.g. Novartis bought back 5% of its shares in 2023) outpaced dividend growth rates. The Danish shipping conglomerate Moller Maersk made a very large cut, which contributed to reducing the European total in the first quarter. However, we expect the seasonally important second quarter to show solid growth in Europe.
What about the rest of the world?
In Asia, BHP's dividend cut in Australia overshadowed the region's better growth, while strong local currency shareholder payout growth in Japan was overshadowed by yen weakness. In the United Kingdom, most companies paid dividends at similar levels to a year ago or increased them by less than 10%.
Sectoral split
Banks accounted for a quarter of global growth in the first quarter, up 12.0%; most sectors experienced growth.
The sectoral picture is one of broad-based strength. Banks accounted for a quarter of global growth in the first quarter, up 12.0%. Only six of the 35 sectors recorded declines and they were very slight, with the exception of transport, which was hit in particular by Moller Maersk. Most sectors recorded high single digit underlying rate increases.
What's next?
Forecasts remain unchanged: 5.0% underlying growth expected in 2024.
The first quarter was broadly in line with Janus Henderson's expectations and all indications are that the rest of the year will see continued progress. Janus Henderson has not changed the 2024 forecast for total payouts of $1.72 trillion. The decrease in extraordinary dividends translates into a 3.9% year-on-year increase in the headline rate, equivalent to a 5.0% rise in the underlying rate.
