DENVER and LONDON, Feb. 19,
2018 /PRNewswire/ -- A strengthening world economy and
rising corporate confidence pushed global dividends to a new high
in 2017, according to the Janus Henderson Global Dividend Index.
Global dividends rose 7.7% on a headline basis, the fastest rate of
growth since 2014, and reached a total of $1.252 trillion. Every region of the world and
almost every industry saw an increase. Moreover, records were
broken in 11 of the index's 41 countries, among them the United States, Japan, Switzerland, Hong
Kong, Taiwan and
the Netherlands.
Key highlights
- Global dividends soared 7.7% in 2017 to a record $1.252 trillion
- Underlying growth was 6.8%, and every region of the world saw
an increase
- JHGDI rose to a record 171.2, meaning dividends have risen by
almost three-quarters since 2009
- Records were broken in 11 out of the index's 41 countries
- Q4 continued the positive trend, up 6.4% on an underlying
basis
- Strong earnings growth around the world in 2018 will likely
support continued dividend increases
- Janus Henderson expects 6.1%
underlying growth, with every region seeing an increase
- A weaker dollar means Janus Henderson expects headline growth
of 7.7%, bringing total global dividends to $1.348 trillion in 2018
Underlying growth, which adjusts for movements in exchange
rates, one-off special dividends and other factors, was an
impressive 6.8%, and showed less divergence than in previous years
across the different regions of the world, reflecting the broadly
based global economic recovery.
The United States has been the
key driver of global dividend growth in recent years. After a
sluggish 2016, growth picked up markedly in 2017, reaching 5.9% on
a headline basis, and 6.3% at the underlying level. U.S.
companies paid their shareholders a record $438.1 billion. Even so, its performance was a
touch below the world average, as other regions accelerated
rapidly.
2017 was also a record year for Asia
Pacific ex Japan. The total
paid jumped 18.8% to $139.9 billion,
boosted by exceptionally large special dividends in Hong Kong, the largest from China Mobile.
Hong Kong, Taiwan and South
Korea all individually broke annual records, too. Underlying
growth for the region was impressive at 8.6%, led by Taiwan and South
Korea, which both saw double-digit increases. Australia also saw strong underlying growth of
9.7%.
Japan joined the
record-breakers, with growth of 11.8% on an underlying basis, after
accounting for the weaker yen. Every Japanese sector, and most
companies, showed growth in yen terms. Dividends in emerging
markets also grew strongly, though they remain a long way below
their 2013 peak. Russia saw
dramatic growth, while China,
which had seen lower payouts two years in a row, avoided a third
consecutive disappointment in 2017.
Europe lagged behind other
regions, with underlying growth of only 2.7%. In total European
companies distributed $227.4 billion,
a disappointing increase of 1.9% in headline terms. A poor fourth
quarter, influenced by cuts from a handful of large companies in
France and Spain, a weak euro during the crucial second
quarter when most European dividends are paid, and lower special
dividends explain why Europe
lagged behind its global peers. For the year overall, France barely grew at all in underlying terms,
after an excellent 2016. Germany,
by contrast, rebounded in 2017, and numbered among the faster
growing nations, along with Austria, Portugal, Belgium, the
Netherlands and Switzerland. The
Netherlands and Switzerland
even reached new record highs. Spain, by contrast, saw the third consecutive
year of declines.
In the UK, headline growth was held back by the weak pound, but
underlying growth was 10.0% as UK-listed multinational mining
companies rapidly restored dividends that had been cut or cancelled
in the lean years for commodity prices.
Janus Henderson forecasts
underlying growth for 2018 of 6.1%, with expansion continuing from
every region of the world. If the dollar maintains its lower level
against other currencies, the 2018 total should benefit from
payments translating to dollars at more favourable exchange rates.
That will help push headline growth to 7.7% again, yielding a new
record total of $1.348 trillion.
Dividends by
Region (US$ billions)
|
Region
|
2014
|
%
Change
|
2015
|
%
Change
|
2016
|
%
Change
|
2017
|
%
Change
|
Q4
2016
|
Q4
2017
|
%
Change
|
Emerging
Markets
|
$126.60
|
-9.10%
|
$112.20
|
-11.40%
|
$87.90
|
-21.60%
|
$102.40
|
16.50%
|
$11.20
|
$15.40
|
37.90%
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe ex
UK
|
$237.50
|
13.70%
|
$213.40
|
-10.10%
|
$223.20
|
4.60%
|
$227.40
|
1.90%
|
$20.80
|
$23.60
|
13.30%
|
|
|
|
|
|
|
|
|
|
|
|
|
Japan
|
$50.00
|
6.40%
|
$52.60
|
5.20%
|
$64.70
|
23.20%
|
$70.00
|
8.10%
|
$25.30
|
$29.20
|
15.70%
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$392.90
|
14.80%
|
$441.20
|
12.30%
|
$445.00
|
0.90%
|
$475.60
|
6.90%
|
$111.00
|
$118.70
|
6.90%
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
Pacific
|
$120.90
|
4.40%
|
$113.80
|
-5.90%
|
$117.80
|
3.50%
|
$139.90
|
18.80%
|
$20.90
|
$24.70
|
18.20%
|
|
|
|
|
|
|
|
|
|
|
|
|
UK
|
$123.30
|
32.30%
|
$96.20
|
-22.00%
|
$93.00
|
-3.30%
|
$95.70
|
3.00%
|
$16.60
|
$18.10
|
10.00%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
$1,051.20
|
11.10%
|
$1,029.30
|
-2.10%
|
$1,031.60
|
0.20%
|
$1,111.00
|
7.70%
|
$205.70
|
$229.70
|
9.20%
|
|
|
|
|
|
|
|
|
|
|
|
|
Divs outside top
1,200
|
$130.40
|
8.60%
|
$130.60
|
0.20%
|
$130.90
|
0.20%
|
$141.00
|
7.70%
|
$26.10
|
$29.10
|
11.70%
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand
total
|
$1,181.60
|
10.80%
|
$1,159.90
|
-1.80%
|
$1,162.50
|
0.20%
|
$1,252.00
|
7.70%
|
$231.80
|
$258.90
|
11.70%
|
Ben Lofthouse, Director of
Global Equity Income at Janus Henderson said: "While equity
markets have been volatile recently, dividend payments are
reflective of corporate health and economic conditions, so we
expect them to be more stable. 2017 was a great year for income
investors with dividend growth broadly spread across countries and
industries. All three of the largest economies in the world, the
U.S., the EU and China, are now
expanding at the same time. As a result, companies are seeing
rising profits, and healthy cash flows, and that's enabling them to
fund generous dividends. The record payout last year was almost
three-quarters higher than in 2009, and there is more to come. The
next few months are set fair, and we expect global dividends to
break new records in 2018."
Notes to the editors:
Methodology
Each year Janus Henderson analyses dividends paid by the 1,200
largest firms by market capitalisation (as at 31/12 before the
start of each year). Dividends are included in the model on the
date they are paid. Dividends are calculated gross, using the share
count prevailing on the pay-date (this is an approximation because
companies in practice fix the exchange rate a little before the pay
date), and converted to USD using the prevailing exchange rate.
Where a scrip dividend is offered, investors are assumed to opt
100% for cash. This will slightly overstate the cash paid out, but
we believe this is the most proactive approach to treat scrip
dividends. In most markets it makes no material difference, though
in some, particularly in European markets, the effect is greater.
Spain is a particular case in
point. The model takes no account of free floats since it is aiming
to capture the dividend-paying capacity of the world's largest
listed companies, without regard for their shareholder base. We
have estimated dividends for stocks outside the top 1,200 using the
average value of these payments compared to the large-cap dividends
over the five-year period (sourced from quoted yield data). This
means they are estimated at a fixed proportion of 12.7% of total
global dividends from the top 1,200, and therefore in our model
grow at the same rate. This means we do not need to make
unsubstantiated assumptions about the rate of growth of these
smaller company dividends. All raw data was provided by Exchange
Data International with analysis conducted by Janus Henderson
Investors.
Press enquiries
Taylor Smith
T: 1-303-336-5031
E: taylor.smith@janushenderson.com
About Janus Henderson Investors
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assets under management (as of 31 December
2017), more than 2,000 employees and offices in 27 cities
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(ASX).
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