Global dividend growth sharp in Q1
Global dividends growth accelerated sharply in Q1 to $218.7 billion and was strong across most industries and regions, except Europe where too few companies made payments, according to Janus Henderson Investors.
The company’s Global Dividend Index found this was the fastest underlying increase since late 2015 and was driven by the speedy transmission into company profits and an accelerating global economy.
However, the special dividends were sharply lower, comparing year-on-year, and after reaching near record levels in Q1 2016 they were down by 0.3 per cent during the first quarter.
This was particularly the case in the US where the market saw the fall in on-off special dividends which resulted in 0.7 per cent lower total dividends paid ($106.9 billion).
At the same time, Hong Kong, Singapore and Australia saw ‘very large’ special dividends.
The company also said that stripping out specials and other minor factors, payouts rose an impressive 14.6 per cent on an underlying basis, with strength particularly in Australia.
The Australian total was 30.6 per cent higher year-on-year on an underlying basis, pushed up by BHP Billiton’s return to form, followed by notable increases from Sydney Airport and Woodside Petroleum.
The headline growth rate in Australia was pushed higher by the addition of AGL Energy and Goodman Group to the index and by a slightly stronger Australian dollar.
At the same time, UK dividends fell 5.3 per cent year-on-year in headline US dollar terms, dragged down by the weak pound.
The emerging markets saw ‘patchy’ dividend growth, despite rising commodity prices and signs of stabilisation in emerging economies, and depended largely on Russia which showed irregular and unpredictable dividend payments.
Janus Henderson’s head of global equity income, Alex Crooke, said: “The outlook for the world economy looks better at present than at any time in the last few years. That means companies can grow profits and dividends at a faster pace”.
“At the moment the uptick is taking place more quickly than we anticipated, and is stronger too, so we are slightly revising up our forecast for the year, despite the big drop in special dividends in Q1,” he said.
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