London Corporate dividends worldwide reached an all-time high of $1.66 trillion in 2023, with record bank payouts accounting for half of the surge, a report indicated Wednesday.
Globally, 86% of listed businesses increased or maintained dividends, according to the quarterly Janus Henderson Global Dividend Index (JHGDI), which predicted a record $1.72 trillion in dividend payouts this year. Microsoft paid the most dividends in 2023, followed by Apple and Exxon Mobil.
UK asset manager Janus Henderson reported 5% underlying growth in corporate dividends from $1.57 trillion in 2022, including currency moves, special dividends, timing adjustments, and index modifications.
"Corporate cash flow in most sectors remained strong, providing firepower for dividends and share buybacks," said Janus Henderson global equity income head Ben Lofthouse. According to LSEG statistics, S&P 500 earnings growth in the fourth quarter of 2023 was predicted to be 9%.
High interest rates have bolstered bank profitability, and in 2023, banks paid out a record $220 billion to shareholders, up 15% from 2022 and continuing a resurgence after pandemic payouts were capped. Rising banks dividends were almost totally offset by mining industry cuts, the research showed, as weaker commodity prices hurt mining profitability.
Five major companies—BHP, Rio Tinto, Petrobras, Intel, and AT&T—cut dividends, lowering the 2023 worldwide dividend growth rate by 2 percentage points. "Beyond these two sectors (banking and mining), whose impact was unusually large, we saw encouraging growth from industries as varied as vehicles, utilities, software, food and engineering, demonstrating the importance of a diversified portfolio," the study concluded.
Europe (excluding the UK) drove two-fifths of the global increase in payouts, which jumped 10.4% to $300.7 billion. Japan contributed, but a weak yen limited it, the paper added. Due to its size, the US contributed most to global dividend growth, but its 5.1% growth rate was average.
Janus Henderson noted severe cuts in Brazil and little growth in China as emerging market payouts were flat. Janus Henderson predicts 5% corporate dividend increase to $1.72 trillion this year.
Lofthouse suggested that mining industry cutbacks may be less significant than bank dividend growth. "Energy prices remain firm so oil dividends look well supported and the big defensive sectors like healthcare, food and basic consumer goods should continue to make steady progress.
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