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Global dividends to fall by 35% in 2020, but some industries more likely to keep payouts

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Global dividends could fall as much as 35% this year, as the coronavirus pandemic continues to cut companies’ profits — but not all industries will be affected equally, according to a new report.

Corporate payouts to shareholders and company profits are set to be hit hard as a result of the health crisis. Having already killed more than 300,000 people worldwide, the pandemic has shut down multiple countries, slowing down economic growth and pushing US unemployment to 14.7% in April, a level not seen since the Great Depression.

The level of uncertainty for the rest of the year is so high that dividend payouts across the world in 2020 will fall dramatically. In a best-case scenario, global dividends will drop by 15% to $1.21 trillion this year, while in a worst-case scenario they could fall 35% to $933bn, according to asset manager Janus Henderson on Monday

“Dividend suspensions are inevitable due to the sudden, unprecedented halt in economic activity in many countries,” said Ben Lofthouse, co-manager of global equity income at Janus Henderson.

The asset manager tracked cancelled and suspended dividend payouts from companies responsible for more than three-quarters of the world’s payouts by value. Some of the key factors in the report included the extent of the lockdown, local regulation and dividend seasonality.

Some regions are likely to see bigger dividend cuts than in the financial crisis of 2008, the report said. North American dividends are likely to be less affected than Europe and the UK. This is partly because North America has high exposure to technology.

Overall, banks, discretionary consumer sectors and economically-sensitive industrial sectors are expected to be most affected. Global dividends from technology, healthcare, food and basic consumer sectors, on the other hand, should be safer.

Asia is expected to have less of an impact in 2020 and take a bigger hit in 2021 due to Asian and Chinese companies already having fixed their payouts for this year based on profits from 2019.

The crisis had little impact on global dividend payments in the first quarter of this year, when they rose 3.6% to $275.4bn , a record high for a first quarter, pushing the Janus Henderson global dividend index to 196.3.

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    Galina Mikova

    Galina is a Hubspot-certified Technical Writer with over 10 years of experience in working with Fortune 500, private investment, banking, FOREX and niche tech companies as well as crypto and blockchain startups. She has a solid background in FinTech and blockchain technology.

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