The Big Picture THE BIG PICTURE: DIVIDENDS UPGRADED AFTER STRONG Q1


The global picture: First quarter dividends by region ($bn) Region


Emerging markets Europe, ex-UK Japan


North America


Asia Pacific, ex-Japan UK


Total


Divs outside top 1,200 Grand total


Q1 2022 % change Q1 2023 % change $14.1 $44.3 $4.4


−1.8% 10.6%


$155.2 $25.2 $15.7


$258.9 $32.8


$291.7


−15.2% 12%


3.1%


−15.6% 7.3% 7.3% 7.3%


$17.3 $60.3 $5.1


$168.6 $23.3 $15.3


$289.9 $36.8


$326.7


22.7% 36%


17.7% 8.6%


−7.4% −2.4% 12% 12% 12%


Source: Janus Henderson


A record dividend payout globally means the outlook for the year looks bright. But, as Andrew Holt finds, there are subtle anomalies in the numbers.


Global markets may be unpredictable but the dividend outlook remains positive, as record payout levels were the order of the day in the first quarter of the year. Data from Janus Henderson reveals that 95% of companies worldwide either held or increased their dividends in the open- ing three months of the year, a period that saw a 12% hike in payouts to $326.7bn (£257.4bn).


This strong showing has triggered an upgrade to the asset manager’s 3.4% full year forecast, with global dividends now expected to hit $1.64trn (£1.33trn) on an underlying basis, 5% higher than last year. During the first quarter, Europe, ex-UK, led the way with 96% of companies increasing or maintaining their payouts in what is tradi- tionally a modest period for boards returning cash to shareholders.


Denmark, Germany and Switzerland accounted for three quar- ters of cash returns and saw one-off payments from Denmark’s Moller-Maersk – the biggest payout in the world during the period – and Volkswagen.


The picture in the UK was different with total payouts 2.4% lower than a year earlier at $15.3bn (£12bn). This was largely due to a weak sterling as no UK company cut its cash returns during the period. North America naturally takes up a decent chunk. It had another strong quarter returning $168bn (£132.4bn) to inves- tors, 8.6% higher than a year earlier. But the aggregate figure for the US can be misleading: special dividends from the likes of Ford boosted the headline figure, and the underlying trend shows slowing growth when you focus on ordinary dividends.


Still, 97% of US companies in the index held or hiked, higher than the global average, with strong contributions from real estate, technology and healthcare companies.


Issue 125 | July-August 2023 | portfolio institutional | 9


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