Janus Henderson upgrades 2022 forecast to $1.52 trillion, rising from $1.47 trillion last quarter

  • 2022 forecast to deliver a new record of $1.52 trillion, up 3.1% on a headline basis, or 5.7% in underlying terms.
  • Global dividends shrugged off 2020’s Covid-19 cuts and reached a new record in 2021.
  • Global payouts surged to $1.47 trillion in 2021, up 14.7% on an underlying basis.
  • Nine-tenths of companies raised or held dividends, indicating broad-based growth.
  • The rebound was largely driven by the mining sector, restored dividends, especially from banks, and the UK and Australia.

Embargoed until 00.01am on Tuesday 1 March 2022, London – 2021 saw global dividends recover very strongly, more than making up for the cuts made during the worst of the pandemic in 2020, according to the latest Janus Henderson Global Dividend Index. Global dividends surged 14.7% on an underlying basis, reaching a new record of $1.47 trillion.

Records were broken in a number of countries, including the US, Brazil, China and Sweden, although growth was fastest in those parts of the world that had seen the biggest declines in 2020, especially Europe, the UK and Australia. Headline growth was 16.8%, boosted by record one-off special dividends. Nine tenths of companies globally increased or held their dividends steady, indicating broad-based growth.

 

Upgraded forecast

The exceptional strength of Q4 payout figures, along with improved prospects for 2022, have led Janus Henderson to upgrade its forecast for the full year. For 2022, Janus Henderson expects global dividends to reach a new record of $1.52 trillion, up 3.1% on a headline basis, or 5.7% in underlying terms.

 

Banks and miners delivered three-fifths of the $212bn increase in payouts in 2021.

A quarter of the increase was delivered by companies restarting payouts paused during 2020. Most of this was due to banks, whose dividends jumped by 40%, or $50.5bn – payments returned to nine-tenths of their pre-pandemic high in 2021. Dividends were driven by restoring payouts to more normal levels given that regulators had curbed distributions in many parts of the world in 2020.

More than one quarter of the $212bn annual dividend increase came from miners, which benefited from soaring commodity prices. Record payments from the miners reflected the strength of their profits. The mining sector distributed $96.6bn over the year, almost double the previous record set in 2019 and ten times more than during the slump in 2015-16, with BHP becoming the world’s largest dividend payer. However, as a highly cyclical sector their distributions will return to more normal levels when the commodity cycle turns.

The global economic recovery enabled payouts from consumer discretionary and industrial companies to grow by 12.8% and 10.0% respectively on an underlying basis, while healthcare and pharmaceutical groups grew their dividends by 8.5%. Technology companies, whose profit growth continued relatively uninterrupted by the pandemic, added $17bn, an increase of 8.0%.

A quarter of the dividend increase was delivered by just nine companies, eight of which are banks or miners.

 

One third of the dividend rebound came from UK and Australia

From a geographical perspective, the most rapid dividend growth came from regions where 2020 had seen the steepest cuts, such as Europe, the UK and Australia. Payouts reached new records in a number of countries including the US, Australia, China and Sweden, but one third of the rebound came from just two countries, Australia and the UK, where a combination of surging mining payouts and restored banking distributions made the biggest contribution to growth.

Jane Shoemake, Client Portfolio Manager, global equity income said:A large part of the 2021 dividend recovery came from a narrow range of companies and sectors in a few parts of the world. But beneath these big numbers, there was broad based growth both geographically and by sector.

In the context of the dramatic rebound seen in the banking sector, and the exceptional cyclical surge from mining companies, it would be easy to overlook the encouraging growth seen from those sectors that have delivered consistent increases in recent years, like the technology sector. The same applies to geographical trends. The US, for example, is often ahead of its peers but saw slower dividend growth than the rest of the world in 2021. This was because it proved to be resilient in 2020 so there was limited scope for a large rebound.

We expect many of the longer-term dividend growth trends witnessed since the index was launched in 2009 to reassert themselves in 2022 and beyond. The big unknown for 2022 is what happens in the mining sector, but it is reasonable to assume that dividends here will be lower than the record levels achieved in 2021 given the significant correction in iron ore.”

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Notes to editors

Janus Henderson Group is a leading global active asset manager dedicated to helping investors achieve long-term financial goals through a broad range of investment solutions, including equities, fixed income, quantitative equities, multi-asset and alternative asset class strategies.

At 31 December 2021, Janus Henderson had approximately US$432 billion in assets under management, more than 2,000 employees, and offices in 25 cities worldwide. Headquartered in London, the company is listed on the New York Stock Exchange (NYSE) and the Australian Securities Exchange (ASX).

Source: Janus Henderson Group plc