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Global dividends close in on pre-pandemic peak

dividend growth arrowGlobal dividends are expected to hit pre-pandemic levels by the end of the year, according to Janus Henderson, as third quarter figures surge.

This is particularly the case for companies in Europe, parts of Asia and emerging markets, the asset management firm said.

Dividends jumped 22% year-on-year reaching $403.5 billion, an all-time high for third quarter figures.

The majority of companies globally either raised their dividends or held them, while mining dividends were found to drive two thirds of the increase. Recently restored banking dividends also made a significant contribution.

Janus Henderson said dividends are now expected to surpass the pre-pandemic peak by the end of December 2021.

“Three important things changed during the third quarter,” said Jane Shoemake, client portfolio manager on the global equity income team at Janus Henderson.

“First and most importantly, mining companies all around the world have benefited from sky-high commodity prices. Many of them delivered record results and dividends followed suit.

“Secondly, banks took quick advantage of the relaxation of limits on dividends and restored payouts to a higher level than seemed possible even a few months ago. And finally, the first few companies in the US to start the annual dividend reset showed that businesses there are keen to return cash to shareholders,” she added.

According to the company’s latest global dividend index, the third quarter of 2021 saw payouts rise at a record pace, meaning the index is now just 2% below its pre-pandemic peak in the first quarter of 2020.

Countries like Japan and the US, where companies refrained from cutting as much in 2020, naturally demonstrated less growth than the global average.

Nevertheless, US company dividends rose by one tenth to a new third quarter record.

A strong quarter for Chinese companies also means the region is on track to deliver record payouts.

© 2021 funds europe.