Surging oil dividends drove global payouts to third-quarter record
The latest edition of the Janus Henderson Global Dividend Index shows that global dividends reached a third-quarter record of $416 billion. Client Portfolio Manager Jane Shoemake discusses the factors that led to the growth.
2 minute watch
Key takeaways:
- Oil producer dividends rose to a record $46.4 billion and overwhelmingly drove Q3 2022 growth, offsetting falling mining payouts.
- Taiwan, the U.S., Hong Kong, and Canada were the most important contributors to global dividend growth, while China disappointed and Australia saw declines.
- The growth seen in the third quarter has led us to upgrade our forecast; Janus Henderson now expects $1.56 trillion in global dividends in 2022, up 8.9% on an underlying basis.
Jane Shoemake: The current global dividend picture is dominated by sector trends, with strong payouts from oil and gas producers helping push headline payouts up 7% to a third-quarter record of $416 billion. If we omit the impact of a strong dollar, underlying growth was around 10%. Surging oil dividends helped offset the slump in the mining sector, where falling commodity prices saw companies lowering payouts from their recent record highs. However, most other sectors managed to grow their payouts year on year, with nine out of 10 companies in our index either raising their dividends or holding them steady.
Seasonally, the third quarter is very important for Chinese dividends, where banks heavily contributed to a nearly 7% raise in payouts. However, it is worth noting that one-third of all Chinese companies in our index reduced their dividends, notably those exposed to the troubled real estate sector.
Elsewhere, we saw record-breaking divided levels in Taiwan, Hong Kong, Brazil, the U.S., and Canada, with the variance in payouts between different countries highlighting the importance for income investors to ensure that they have a diversified portfolio.
The growth seen in the third quarter has led us to upgrade our 2022 forecast by $30 billion. We now expect headline dividends of $1.56 trillion, up over 8% year on year. Looking further ahead, dividends are currently well covered by profits, which should provide support for payouts even as the global economy slows.
Related insights
These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
Marketing Communication.
2 minute watch
Key takeaways:
- Oil producer dividends rose to a record $46.4 billion and overwhelmingly drove Q3 2022 growth, offsetting falling mining payouts.
- Taiwan, the U.S., Hong Kong, and Canada were the most important contributors to global dividend growth, while China disappointed and Australia saw declines.
- The growth seen in the third quarter has led us to upgrade our forecast; Janus Henderson now expects $1.56 trillion in global dividends in 2022, up 8.9% on an underlying basis.