Monday 18 February 2019 12:34 am

Global dividends jumped to $1.37 trillion in 2018 on strong banking and mining growth

Global dividends jumped 9.3 per cent to $1.37 trillion (£1.06 trillion) in 2018, with underlying growth of 8.5 per cent, the best performance since 2015.

Nine in ten companies globally increased dividends or held them steady, with underlying growth for the year outstripping the long-term trend of five to seven per cent.

Banking and mining dividend payouts rose sharply, while telecoms performed weakly.

Read more: FTSE dividend payments to hit record £94bn next year and yields rise

In the fourth quarter dividend growth was 8.3 per cent, totalling $272.9bn, a record for the fourth quarter.

Asset manager Janus Henderson, which carried out the research, forecast 2019 dividends 3.3 per cent higher at $1.414 trillion, representing underlying growth of 5.1 per cent.

European dividends rose 5.4 per cent on an underlying basis, held back by slow growth in Switzerland and a large cut from brewer Anheuser Busch in Belgium.

However, nine tenths of European companies increased their dividends with particularly strong performances in Germany, France and Spain.

The mining sector grew strongly last year, which helped boost UK dividends as many of the largest mining players are London-listed.

Read more: UK dividends hit record-breaking high in 2018


Banking dividends grew 13.6 per cent on an underlying basis while oil company dividend growth was 15.4 per cent.

Ben Lofthouse, head of global equity income at Janus Henderson said: “Despite more challenging equity market conditions, investors can take comfort in the ability of the world’s companies to continue to generate income. Yields in many parts of the world are very attractive, while 8.5 per cent dividend growth is ahead of the long-term trend.

“This strength reflects a number of factors; several sectors, such as mining, oil and banking have been normalising their dividend payments, after a period of low or no dividends, while some of the biggest tech firms are increasingly adopting a dividend-paying culture.”

Looking ahead Lofthouse said: “We expect dividend growth to be more in line with the longer-run trend. Corporate profit expectations have fallen as global economic forecasts have been revised down, although most observers still expect companies to deliver positive earnings growth in 2019. Dividends in any case are much less volatile than earnings, so we remain optimistic on the prospects for income investors.”

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