Rise driven by strong market performances in North America and emerging economies

Companies paid out a record $1.43tn (£1.10tn) in dividends to shareholders around the world last year.

The record-breaking annual dividend payout from listed companies was driven by strong performances in stock markets in North America and emerging economies, including by some unusually high special dividends, although global economic uncertainty slowed the annual pace of growth. The total payment was 3.5% higher than in 2018.

Analysts at the asset manager Janus Henderson studied dividends paid by the world’s 1,200 largest companies in 2019. It found shareholder payouts from UK and European firms were less generous than the global average.

Payouts to investors in oil companies rose more quickly, by a 10th, while dividends from telecoms stocks fell.

Dividends from UK-listed companies reached $105.8bn (£81.2bn) in 2019, a rise of 6.2% on the previous year, boosted by large special payments from mining companies Rio Tinto and BHP, and Royal Bank of Scotland. However, the UK’s underlying 2.9% growth was below the global average. In addition, many of the UK’s largest dividend payers including Shell, HSBC, BP, GlaxoSmithKline and AstraZeneca have hardly increased their payments in the past four years.

In Europe, investors have traditionally received higher dividends, giving less opportunity for payment growth. Payments vary widely between European countries. For example, France registered record payouts, while Belgium’s were the weakest, due to a halving in the payment made by brewer Anheuser-Busch.

From a low base in 2009 after the financial crisis, dividends have grown strongly over the past decade. In that time, payouts have almost doubled, with investors receiving $694bn more in dividends in 2019 than 10 years previously. Technology dividends, a notable bright spot, have quadrupled since 2009.

Ben Lofthouse, head of global equity income at Janus Henderson, said: “With the exception of a few specific sectors, the pace of earnings growth slowed across the world in 2019 as the global economy lost some momentum.”

However, Janus Henderson believed investor payouts would rise again this year and predicted global economic growth and increasing company profits. Lofthouse said: “2020 is on track to deliver the fifth consecutive year of record dividends.”

Read full article here.

Article by Joanna Partridge