- Q1 dividends rose to a first-quarter record of $339.2bn, up 2.4% on a headline basis and 6.8% on an underlying basis
- 93% of companies globally either increased payouts or held them steady
- The US registered an all-time quarterly record, boosted by additional impetus from Meta which paid its first ever dividend
- Banks accounted for a quarter of global growth in Q1, up by 12.0%
- Sweden and Canada broke first-quarter records
- Janus Henderson’s 2024 dividend forecast remains unchanged at $72 trillion (up 3.9% on a headline basis and equivalent to underlying growth of 5.0%)
23 MAY 2024 – Global dividends climbed to a first-quarter record of $339.2bn in Q1 2024, according to the latest Global Dividend Index from Janus Henderson, with payouts 51% larger than in Q1 2017. Strong underlying growth of 6.8% was the key driver of progress, though the headline total rose more slowly (2.4%) owing to lower one-off special dividends. Globally, 93% of companies either raised their dividends or held them steady.
Q1 payouts in US marked an all-time quarterly record
US dividend growth accelerated in the first quarter of 2024, rising to an all-time quarterly record of $164.3bn, up by 7.0% on an underlying basis. The restoration of Walt Disney’s payout after the pandemic, and the first Q1 dividends from Meta and T-Mobile, were the main drivers of the growth. 97% of US companies either increased their payouts or held them steady; included in the 3% of companies who cut payouts was pharmacy chain Walgreens Boots Alliance, which made its first dividend cut in almost half a century following slowing sales and growing competitive pressure.
Lower special dividends and seasonal factors masked encouraging growth in Europe ex-UK
European dividend payouts in the first quarter are typically dominated by Switzerland and there are relatively few payments in the rest of the region. In Q1 2024, every Swiss company in the index increased its per share dividend but large share buybacks exceeded dividend growth rates leading payouts to fall in Swiss franc terms. Denmark was the next largest payer after Switzerland; payouts there slumped by almost two thirds on a headline basis due mainly to the impact of cuts at Moller Maersk. In Germany, a double-digit increase from Siemens on the back of record profits helped secure underlying growth of 10.3%. Janus Henderson expects to see solid growth in the region in the seasonally important second quarter of the year.
Dividend growth in the UK was boosted by one-off payments
UK dividends rose 2.4% in the first quarter on an underlying basis, with companies distributing $15.3bn. The headline total (6.8%) was boosted by one-off payments, such as the special dividend from Associated British Foods which traded strongly over the Christmas period. The biggest increase came from catering and support services company Compass as it continues its post-pandemic recovery, while the biggest cut came from utility company SSE which increased its capital expenditure plans.
Banks accounted for a quarter of global growth in Q1
Across sectors, banks made the largest contribution to Q1 growth, with payouts up by 12.0% on an underlying basis. General retail was boosted by Alibaba’s first dividend payment of $2.6bn. Most sectors made single-digit underlying increases; the only sector to see a big decline in the first quarter was transport – part of the industrials group – which was driven by a cut from Moller Maersk.
Forecast for 2024 remains unchanged, with underlying growth expected at 5.0%
Payments in the first quarter were broadly in line with expectations and are expected to make steady progress during the rest of the year. Janus Henderson has made no change to its 2024 forecast for total payouts of $1.72 trillion. Lower special dividends mean the headline increase is set to be 3.9% year-on-year, equivalent to a rise of 5.0% on an underlying basis.
Jane Shoemake, Client Portfolio Manager on the Global Equity Income team at Janus Henderson, said: “Investors have enjoyed a strong start to 2024, with share prices rising globally and dividend growth continuing to show the strong underlying momentum reached towards the end of 2023. We have reasonable visibility over payouts in the crucial second quarter, which sees seasonal peaks in Europe, Japan and the UK. While a very small handful of large companies have announced significant dividend cuts, including Australian energy company Woodside, Bayer, the German chemicals company and UK listed mining group Glencore, the broad picture is one of continued resilience, especially in Europe, the US and Canada.
Beyond the broadly positive picture around the world, the first distributions from Meta and Alibaba will also add almost half a percentage point to global growth this year between them. Companies like these are recognising that paying dividends is an important route – beyond share buybacks – to return capital to their investors.”
Andrew Jones, Portfolio Manager on the UK Responsible Income Fund, added: “In the UK, dividend growth was relatively pedestrian in the first quarter, although we do expect the situation to improve through the second half of the year as cost pressures ease, interest rates are cut, and the economy starts to recover, driven by real wage growth and a more buoyant consumer.”
ENDS
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Notes to editors
Our headline growth rate describes the change in the total dollar amount paid by companies compared to the corresponding quarter each year. Our underlying figure adjusts for the distortion that can be caused by one-off special dividends, changing exchange rates, the effect of companies entering and leaving the global top 1,200 that comprise our index and the impact of changes in payment dates. The latter two tend to be negligible over the course of a whole year at the global level, though they can have a greater impact in any one quarter, geography or sector.
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