Global dividends hit record, Nestlè on the top

Global dividends hit an all-time quarterly record of $447.5 billion (€380.5 billion) in the second quarter of this year as growth accelerated to the fastest rate since 2015, according to new data. 

The Janus Henderson Global Dividend Index revealed that the amount paid out in dividends globally increased 5.4% year-on-year on a headline basis – equivalent to an underlying rise of 7.2% once exchange rates, special dividends and other factors were taken into account. The asset manager raised its dividend forecast for the whole of 2017 to $1.208 trillion, up $50 billion since an initial forecast in January, following evidence of “more synchronised” global economic growth, an oil price rally and a revival in banking sector payouts. 

The US, Japan, Switzerland, Netherlands, Belgium, Indonesia, and South Korea all posted new quarterly records. The UK was the only country to buck the trend, with dividends falling 3.5% to $32.5 billion on the back of a weaker pound since last year’s referendum decision that will lead to the UK leaving the European Union. 

“The global economy is very supportive for company profits and dividends at present and helped drive record payouts in many countries around the world,” said Alex Crooke, head of global equity income at Janus Henderson. “Investors will be pleased they are enjoying one of those periods when there is synchronised underlying dividend growth across all regions of the world.” Over the last decade the investment industry has launched a growing number of ‘dividend’ funds which specifically target companies that pay higher dividends rather than try to achieve higher share price growth. This has led to some firms purposely aiming to increase dividends to attract investors.

Economic forecasts for 2017 are seeing upgrades, and that's good for dividend stocks, meaning companies are less likely to cut their payouts and could even increase them. This is especially true in the U.S. where some of the biggest payers yield less than Treasury debt, compared to Europe's top dividend stocks which yield way more than German bonds.

The Janus Henderson Global Dividend Index is a long-term, proprietary study into global dividend trends. It measures the progress global firms are making in paying their investors an income on their capital. Their Global Dividend Study report looks at dividends paid each quarter by the world’s largest 1,200 firms by market capitalization.

The Top Ten

*Source: Janus Henderson Global Dividend Study, August 2017. All yield in local currencies. Ranking as of 2Q17.