Healthy growth in global dividends

Despite fears over dwindling worldwide growth, global companies paid out more in dividends last year than any year on record

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.

"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.

Recommended

Stockmarket crash: is the “superbubble” heading for a “superbust”?
Stockmarkets

Stockmarket crash: is the “superbubble” heading for a “superbust”?

America's Nasdaq stock index is down by more than 10% after soaring to all-time highs in a "superbubble". Are we about to see a "superbust" stockmarke…
21 Jan 2022
Seven cheap defence stocks to buy now
Share tips

Seven cheap defence stocks to buy now

We’ve got used to a world without war between major powers, but that era is coming to an end as Russia threatens Ukraine and China eyes Taiwan. Buy de…
21 Jan 2022
Barry Norris: investing for a post-pandemic world
Investment strategy

Barry Norris: investing for a post-pandemic world

Barry Norris, manager of the Argonaut absolute return fund, explains what the investment landscape looks like in a post pandemic world, with the end o…
21 Jan 2022
What can the “January barometer” tell us about 2022 stockmarket prospects?
Investment strategy

What can the “January barometer” tell us about 2022 stockmarket prospects?

How the stockmarket performs in the first month of the year can often have a bearing on its performance for the remainder. Max King looks at what it’s…
10 Jan 2022

Most Popular

Ask for a pay rise – everyone else is
Inflation

Ask for a pay rise – everyone else is

As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why yo…
17 Jan 2022
US inflation is at its highest since 1982. Why aren’t markets panicking?
Inflation

US inflation is at its highest since 1982. Why aren’t markets panicking?

US inflation is at 7% – the last time it was this high interest rates were at 14%. But instead of panicking, markets just shrugged. John Stepek explai…
13 Jan 2022
Interest rates might rise faster than expected – what does that mean for your money?
Global Economy

Interest rates might rise faster than expected – what does that mean for your money?

The idea that the US Federal Reserve could raise interest rates much earlier than anticipated has upset the markets. John Stepek explains why, and wha…
6 Jan 2022