Healthy growth in global dividends

Despite fears over dwindling worldwide growth, global companies paid out morein dividends last year thanany year on record, saysKate Beioley in the Financial Times: $1.37trn, a rise of 9.3% from last year, according to Janus Henderson's latest dividend index.

Canada enjoyed the fastest dividend growth among large developed economies with 11.8%, driven by oil companies and banks. Japan saw the second-fastest growth with 10.6%. US payouts climbed by 7.8%. In Britain, underlying dividend growth (discounting special payouts) was slightly ahead of the global average with 8.8%.

Mining companies, banks, and British American Tobacco made the largest contribution to growth. Despite the recent global slowdown, payouts should keep climbing in 2019, reckons Janus Henderson.

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"Dividends tend to be more stable than profits because company managements store up cash for more difficult times and are reluctant to cut [them]," says Patrick Hosking in The Times. What's more, reinvested dividends account for the vast majority of long-term returns.

According to the Barclays Equity Gilt study, £100 invested in the UK stockmarket in 1899 would have been worth £34,758 after inflation by the end of 2017 if the dividends had been reinvested every year. Had they not been reinvested, the initial stake would now be worth just £203 in real terms.