Healthy growth in global dividends

published 8 March 2019

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.

Marina Gerner is an award-winning journalist and columnist who has written for the Financial Times, the Times Literary Supplement, the Economist, The Guardian and Standpoint magazine in the UK; the New York Observer in the US; and die Bild and Frankfurter Rundschau in Germany.

Marina is also an adjunct professor at the NYU Stern School of Business at their London campus, and has a PhD from the London School of Economics.

Her first book, The Vagina Business, deals with the potential of “femtech” to transform women’s lives, and will be published by Icon Books in September 2024.

Marina is trilingual and lives in London.