US and Asian shares lead surge in global dividend bonanza

Global dividend payments rose to record levels in 2017, hitting a total of $1.252 trillion, according to Janus Henderson’s latest Global Dividend Index. 

Headline growth stood at 7.7 per cent, while underlying growth – growth adjusted for exchange rate movements and one-off special dividends– stood at 6.8 per in 2017. The headline growth rate for the year was the fastest seen since 2014, beating Janus Henderson’s forecasts. 

The surge in dividend payments was largely driven by strong global economic growth as well as rising corporate confidence – particularly in the US. 

UK-listed companies saw strong dividend growth in 2017, although they lagged the rest of the world. Last year UK-listed firms saw underlying dividend growth of 10 per cent, largely driven by mining companies restoring dividends that they had cut in previous years. 

Headline growth, however, was more modest, at 3 per cent. This was reflective of many UK companies no longer qualifying for the index of the top 1,200 dividend-paying companies in 2017 as a result of the pound’s devaluation. 

Janus Henderson Global Dividend Index: UK dividend index compared to global index

Europe ex UK also underperformed the rest of the world, with underlying dividend growth of just 2.7 per cent. In total, European companies paid out 227.4 billion in 2017, giving a headline growth rate of just 1.9 per cent. This was the result of both a weak euro and meagre special dividend payments. 

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By contrast, both North America and Asia saw strong dividend growth. North American dividends enjoyed headline growth of 6.9 per cent and underlying growth of 6.5 per cent. 

Following a weak 2016, the US surged ahead in dividend growth, with an underlying growth rate of 6.3 per cent in 2017. In total, US companies paid their shareholders a record $438.1 billion in dividends in 2017 – an increase of $24.4 billion. Canada also saw strong performance, with underlying dividend growth coming in at 9.4 per cent and headline growth at 19.6 per cent in 2017.

Asia ex Japan headline dividend payments jumped by 18.8 per cent, while underlying dividends grew by 8.6 per cent in 2017. This was a record year for the region, with the total paid out reaching $139.9 billion. Hong Kong, Taiwan and South Korea all broke records for dividend payouts. The largest payments came from Hong Kong-listed China Mobile, which was nearly able to unseat Royal Dutch Shell as the world’s biggest dividend payer. 

The region is now experiencing the fastest rate of dividend growth since 2009, surpassing North America. 

Japan too saw strong growth off the back of rising profits. The country saw record payouts of $70 billion as a result of its headline growth rate of 8.1 per cent. Underlying growth was even stronger at 11.8 per cent. 

Toyota Motor dominated dividend payments, despite yield being flat, with the car manufacturer account for $1 of every $11 paid. Other firms such as NTT DoCoMo, Nippon Telegraph, KDDI and Mitsubishi Corporation raised their dividends by double digit figures. 

Emerging market dividend growth was more mixed. Some economies were buoyed by rising energy prices: for example Russia had an underlying growth rate of 35.7 per cent for this reason. Likewise, Petrochina helped boost Chinese dividend payouts, giving it a headline increase of 5.5 per cent and underlying growth of 3.1 per cent. 

Brazil and India saw respectable underlying growth, with the former achieving 6.5 per cent and the latter 3.7 per cent. South Africa, meanwhile, saw total dividend payouts fall. 

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