Investors have enjoyed a good start to the year with increases in prices around the world and with dividends which continue to show the strong growth they had achieved at the end of 2023, marking this year record levels. It is expected that in the second quarter, when seasonal highs are recorded in Europe, Japan and the United Kingdom, The trend will continue since companies recognize that the payment of dividends is an important channel, in addition to the mere repurchase of shares, to return capital to its investors.
According to the latest Janus Henderson Global Index, global dividends reached the record figure of 339.2 billion dollars despite a lower distribution of extraordinary dividends.
However, special dividends remained relatively high compared to most previous first quarters: this year’s decline was simply due to the Q1 2023 base being exceptionally high, influenced by just two companies. Globally, 93% of companies paying dividends in the first quarter increased them or kept them intact.
As explained by the manager, the first quarter is seasonally quiet in many parts of the world, but records were broken in Sweden and Canada, while distributions in the United States set a historical record. Two very large companies, Meta and Alibaba, they paid the first dividends in its history and boosted the global total for the first quarter by more than one percentage point, they explain.
A notable fact is that the increase in dividends in the United States accelerated in the first quarter, when they reached a quarterly record of 164.3 billion dollars. The reestablishment of shareholder remuneration by Walt Disney after the pandemic and the first dividends of the first quarter of Meta and T-Mobile They were mainly responsible for the acceleration of compensation in the United States.
In the case of Europe, the continent is dominated by Swiss, where payouts fell in Swiss franc terms: all Swiss companies in the Janus Henderson index increased their dividend per share, but strong share buybacks (For example, Novartis repurchased 5% of its shares in 2023) They exceeded dividend growth rates. The Danish shipping conglomerate Moller Maersk made a very important cut, which contributed to reducing the European total in the first quarter. However, Janus Henderson expects the seasonally important second quarter to show strong growth in Europe.
In Asiathe reduction of the dividend of BHP in Australia overshadowed the region’s better growthwhile the strong increase in shareholder remuneration in local currency in Japan was dampened by the yen weakness. In the United Kingdom, most companies paid dividends of the same amount as a year ago or increased them by less than 10%.
Record dividends: banks accounted for a quarter of the total
Regarding the sectoral panorama, it is of general strength where the Banks accounted for a quarter of global growth in the first quarterwith a 12% increase. Only 6 of Janus Henderson’s 35 sectors recorded declines and they were very slight, with the exception of transportation, affected in particular by Moller Maersk. Most sectors recorded high single-digit increases in underlying rates.
According to Janus Henderson’s balance sheet, The first quarter was generally in line with expectations and everything indicates that the trend will continue for the rest of the year. In this sense, the manager maintains the 2024 forecast of total disbursements of 1.72 trillion dollars while the decrease in extraordinary dividends translates into an increase of 3.9% year-on-year.
