Global dividends on track for full recovery, report finds

global_dividendsGlobal dividends are forecast to regain their pre-pandemic highs in 12 months as payouts in the second quarter jumped by 26% year-on-year, according to Janus Henderson.

Payouts worldwide recovered to $471.7 billion (€401.9 billion) in Q2, only 6.8% below their Q2 levels in 2019, data from the latest Janus Henderson Global Index report shows.

Nearly 85% of companies increased their dividends or held them steady compared to Q2 2020.

Dividends from companies restarting payments totalled $33.3 billion and contributed three quarters of the underlying growth in Q2.

Janus Henderson has upgraded its 2021 dividends forecast to $1.39 trillion from $1.36 trillion, just 3% below the pre-pandemic peak, stating that a recovery to pre-pandemic levels is expeted in 12 months.

Jane Shoemake, client portfolio manager on the global equity income team at Janus Henderson, said: “Just as the impact of the pandemic on company dividends has been consistent with a conventional but severe recession, so the recovery is also consistent with the rapid economic bounce-back now occurring in those parts of the world where vaccination programmes are enabling economies to reopen.

“Households have record savings and there is pent-up demand to spend which should be good for company profits.”

There was an “enormous” divergence across markets, however. While payouts were up 66.4% in Europe and 60.9% in the UK, in Japan and North America they increased by just 0.4% and 5% respectively. 

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