DENVER–(BUSINESS WIRE)–Global dividends shrugged off concerns about the world economy, rising
7.8% on a headline basis in the first quarter, and reaching a
first-quarter record of US$263.3bn, according to the latest Janus
Henderson Global Dividend Index. Underlying growth of 7.5% followed the
same trend as large special dividends were offset by negative
exchange-rate effects.
-
Global dividends shrugged off concerns over global economic growth,
rising 7.8% to a first-quarter record of US$263.3bn -
Underlying growth was 7.5% with the impact of large special dividend
payments offset by exchange rate moves - Janus Henderson Global Dividend Index rose to a record 190.1
-
No change in 2019 forecast as higher special dividends are offset by
the strength of the US dollar -
Janus Henderson expects a record US$1.43 trillion in payments this
year, up 4.2% in headline terms, or 5.2% on an underlying basis
The Janus Henderson Global Dividend Index rose to a record 190.1,
meaning that dividends are now almost twice the level they were a decade
ago when the index started at the end of 2009.
All-time quarterly records were broken in the United States and Canada
(which are less affected by seasonal payment changes). Growth in North
America was the fastest in the world on an underlying basis, and its
seasonally large weighting in the first quarter meant it made a
significant contribution to overall global dividend growth. In the US
dividends totalled a record US$122.5bn, up 8.3% on a headline basis,
with underlying growth even better at 9.6%. US growth has exceeded the
global average 70% of the time over the last five years, as company
profits have benefitted from a robust economy and favourable tax
changes. Almost nine tenths of US companies in our index raised their
dividends, with the largest increases coming from the banking sector.
The first quarter sees relatively few dividends paid in Europe. Seasonal
patterns mean Switzerland and Spain are overrepresented, while France
and Germany make only a small contribution. Headline growth of 9.2% in
Europe was boosted by special dividends; underlying growth of 5.3% was
in line with 2018 performance. In the UK, underlying growth of 4.4%
lagged the global average in Q1 but was in line with the UK’s long-run
trend.
Asia Pacific ex Japan has seen the world’s strongest dividend growth
since 2009, thanks to rising profits and expanding payout ratios. The Q1
total of US$18.1bn was up 14.7% year-on-year on a headline basis,
breaking the record for first-quarter payouts, though this was mainly
due to one-offs in a seasonally quiet quarter for dividends. Underlying
growth was a more modest 3.8% with Hong Kong leading the way, while
Australia lagged behind.
Income investors in Japan have enjoyed growth far ahead of the global
average over the last five years as more Japanese companies have
embraced a dividend-paying culture. Dividends are 70% higher than in
2014, compared to 25% for the rest of the world. This strong performance
continued in the first quarter with underlying growth of 8.7%.
Emerging markets were weaker than their developed counterparts, as they
were the first to feel the effects of tighter US monetary policy and
global trade concerns, both in their exchange rates and in company
profitability. Underlying growth was 2.2%, due largely to strong
performance from India.
At the sector level, pharmaceutical stocks were the largest payers,
contributing US$1 of every US$8 paid globally. The sector delivered an
all-time record of US$30.1bn, though its underlying growth rate was
lower than the global average. The much smaller leisure sector also
delivered a record level of payments, boosted by a large special
dividend from the UK’s InterContinental Hotels. On an underlying basis,
financial dividends grew fastest, thanks in particular to US banks and
real estate companies, while oil dividends also bounced back, up by a
tenth year-on-year thanks to higher oil prices.
For the full year, Janus Henderson expects global dividends to reach a
record US$1.43 trillion, up 4.2% in headline terms, and 5.2% on an
underlying basis. Higher special dividends than originally expected
(Janus Henderson’s base case assumes each year that they revert to the
longer-run average) are likely to be broadly offset by a more negative
impact from exchange rates (based on the dollar’s current level).
| Annual dividends by region in US$ billions | ||||||||||||||||||||||||||||||||||||
| Region | 2015 | % change | 2016 | % change | 2017 | % change | 2018 | % change |
Q1
2018 |
% change |
Q1
2019 |
% change | ||||||||||||||||||||||||
| Emerging Markets | $ | 114.1 | -9.9 | % | $ | 88.7 | -22.3 | % | $ | 104.2 | 17.5 | % | $ | 122.5 | 17.5 | % | $ | 17.3 | 29.4 | % | $ | 16.2 | -6.1 | % | ||||||||||||
| Europe ex UK | $ | 213.4 | -10.1 | % | $ | 223.2 | 4.6 | % | $ | 225.1 | 0.8 | % | $ | 256.1 | 13.8 | % | $ | 36.6 | 2.8 | % | $ | 40.0 | 9.2 | % | ||||||||||||
| Japan | $ | 52.6 | 5.2 | % | $ | 64.7 | 23.2 | % | $ | 70.0 | 8.1 | % | $ | 79.1 | 13.0 | % | $ | 5.2 | 16.8 | % | $ | 5.5 | 5.7 | % | ||||||||||||
| North America | $ | 441.2 | 12.3 | % | $ | 445.0 | 0.9 | % | $ | 475.7 | 6.9 | % | $ | 509.9 | 7.2 | % | $ | 123.2 | 6.1 | % | $ | 133.1 | 8.1 | % | ||||||||||||
| Asia Pacific | $ | 113.8 | -5.9 | % | $ | 117.8 | 3.5 | % | $ | 141.6 | 20.2 | % | $ | 150.0 | 6.0 | % | $ | 15.8 | -2.2 | % | $ | 18.1 | 14.7 | % | ||||||||||||
| UK | $ | 96.2 | -22.0 | % | $ | 93.0 | -3.3 | % | $ | 95.7 | 3.0 | % | $ | 99.5 | 4.0 | % | $ | 18.7 | 21.1 | % | $ | 20.7 | 10.5 | % | ||||||||||||
| Total | $ | 1,031.2 | -1.9 | % | $ | 1,032.4 | 0.1 | % | $ | 1,112.3 | 7.7 | % | $ | 1,217.0 | 9.4 | % | $ | 216.8 | 7.8 | % | $ | 233.7 | 7.8 | % | ||||||||||||
| Divs outside top 1,200 | $ | 130.8 | 0.3 | % | $ | 131.0 | 0.1 | % | $ | 141.1 | 7.7 | % | $ | 154.4 | 9.4 | % | $ | 27.5 | 7.8 | % | $ | 29.6 | 7.8 | % | ||||||||||||
| Grand Total | $ | 1,162.1 | -1.6 | % | $ | 1,163.3 | 0.1 | % | $ | 1,253.4 | 7.7 | % | $ | 1,371.4 | 9.4 | % | $ | 244.3 | 7.8 | % | $ | 263.3 | 7.8 | % | ||||||||||||
Ben Lofthouse, Head of Global Equity Income at Janus Henderson, said:
“Dividend growth has made a strong start in 2019. This reflects a
continuation of the robust growth witnessed in 2018, rather than
necessarily setting the tone for another above-trend year in 2019.
Market expectations for corporate earnings have moderated in recent
months as global economic momentum has slowed and forecasts may yet come
down a bit further. Dividends are a lagging indicator of company health,
so a reduction in their rate of increase is a normal consequence of
slower earnings growth. Nevertheless, we do not yet feel the need to
make changes to our dividend forecast for 2019. We have already allowed
for a slowdown in growth this year, and would highlight that dividends
are far less volatile than earnings. This is one of the major benefits
for income investors – a diversified portfolio of equities can provide a
stable flow of dividends that can grow over the long term, even when
earnings and financial markets are experiencing some volatility. We
believe Investors can therefore look forward to dividend growth of
around 4-5% in 2019 and another record year for dividend payments.”
Notes to editors
Methodology
Each year Janus Henderson analyses dividends paid by the 1,200 largest
firms by market capitalisation (at 12/31 before the start of each year).
Dividends are included in the model on the date they are paid. Dividends
are calculated gross, using the share count prevailing on the pay-date
(this is an approximation because companies in practice fix the exchange
rate a little before the pay-date), and converted to USD using the
prevailing exchange rate. Where a scrip dividend is offered, investors
are assumed to opt 100% for cash. This will slightly overstate the cash
paid out, but we believe this is the most proactive approach to treat
scrip dividends. In most markets it makes no material difference, though
in some, particularly in European markets, the effect is greater. Spain
is a particular case in point. The model takes no account of free floats
since it is aiming to capture the dividend-paying capacity of the
world’s largest listed companies, without regard for their shareholder
base. We have estimated dividends for stocks outside the top 1,200 using
the average value of these payments compared to the large-cap dividends
over the five-year period (sourced from quoted yield data). This means
they are estimated at a fixed proportion of 12.7% of total global
dividends from the top 1,200, and therefore in our model grow at the
same rate. This means we do not need to make unsubstantiated assumptions
about the rate of growth of these smaller company dividends. All raw
data was provided by Exchange Data International with analysis conducted
by Janus Henderson Investors.
About Janus Henderson
Janus Henderson Group (JHG) is a leading global active asset manager
dedicated to helping investors achieve long-term financial goals through
a broad range of investment solutions, including equities, fixed income,
quantitative equities, multi-asset and alternative asset class
strategies.
Janus Henderson has approximately US$357bn in assets under management
(at 31 March 2019), more than 2,000 employees, and offices in 28 cities
worldwide. Headquartered in London, the company is listed on the New
York Stock Exchange (NYSE) and the Australian Securities Exchange (ASX).
This press release is solely for the use of members of the media and
should not be relied upon by personal investors, financial advisers or
institutional investors. The information in the document is not intended
or should not be construed as investment advice. Past performance is no
guarantee of future results.
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fluctuation of value.
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fluctuations, political and economic uncertainty, increased volatility,
lower liquidity and differing financial and information reporting
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