Public companies paid out a record $1.43tn in dividends to shareholders around the world last year.
This payout, up 3.5 per cent on a year ago, was driven by growing firms available for trade in the US, Japan and emerging markets.
US dividends hit a record $490.8bn last year rising 6.8 per cent on an underlying basis, while Japan posted its fifth year in a row of record-breaking dividend growth, according to data from asset manager Janus Henderson. Firms such as Apple, ExxonMobil and Microsoft helped boost US payouts. New annual records were also set in Canada, Russia and France.
Oil firms payouts jumped by 10 per cent last year, but investors in telecom operators across the world saw dividends fall.
‘Challenging global economic backdrop’
However, a “more challenging global economic backdrop” meant that last year dividends grew at their slowest rate since 2016, said the report.
Last month, the International Monetary Fund (IMF) revised down its forecasts for growth for 2019 to 2.9 per cent and 3.3 per cent for this year.
“The projected recovery for global growth remains uncertain. It continues to rely on recoveries in stressed and underperforming emerging market economies, as growth in advanced economies stabilizes at close to current levels,” said Gita Gopinath, the IMF’s chief economist.
Markets in the UK and across Europe “lagged behind the global average” last year, the survey said.
In Europe, payouts fell by 2 per cent to $251.4bn, mainly owing to a sharply lower euro against the dollar. Underlying growth was 3.8 per cent, a little behind the underlying global average, of 5.4 per cent, but with wide divergence from country to country.
US dividend powerhouse
The UK saw headline growth boosted by special dividends from miners Rio Tinto and BHP as well as Royal Bank of Scotland (pictured), but underlying growth was just 2.9 per cent, behind the global average.
In China, a significant increase from oil group Petrochina pushed its payout total 4.4 per cent higher, but without this effect, Chinese dividends were flat. Australian investors saw their dividends cut by two fifths. Overall, emerging-market payouts were lifted by sharp increases in Russia.
Over the last decade, US dividends have risen 136 per cent, second only to Japan, and have contributed half of the world’s dividend growth among traded firms over this period. US dividends from banks have doubled over the last five years, putting them ahead of any other sector.
European dividends have grown more slowly than any other region over the last decade, though as a higher-yielding region, there is less room for dividend growth.
Over the last ten years, the world’s companies have paid their shareholders $11.4trn in total.