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Global Corporate Dividends Achieve Record High of $1.66 Trillion in 2023

Azeez Mustapha

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In 2023, global corporate dividends surged to an unprecedented $1.66 trillion, with record bank payouts contributing half of the growth, as revealed by a report on Wednesday.

According to the quarterly Janus Henderson Global Dividend Index (JHGDI) report, 86% of listed companies worldwide either raised or maintained dividends, with projections indicating that dividend payouts could reach a new high of $1.72 trillion this year.

In 2023, Microsoft (MSFT.O) emerged as the top dividend payer globally, followed by Apple (AAPL.O) and Exxon Mobil. The total corporate dividends increased from $1.57 trillion in 2022, with underlying growth of 5%, accounting for currency fluctuations, special dividends, timing adjustments, and index changes, stated UK asset manager Janus Henderson.
Global Corporate Dividends Achieve Record High of $1.66 Trillion in 2023“Corporate cash flow remained robust across most sectors, empowering dividends and share repurchases,” remarked Ben Lofthouse.

LSEG data indicates that earnings growth for the S&P 500 in the fourth quarter of 2023 was anticipated to reach 9% year-on-year. In 2023, high interest rates bolstered bank margins, leading to a record payout of $220 billion to shareholders, marking a 15% underlying increase from 2022 and continuing a rebound post-pandemic payout freezes.

However, the report noted that any positive effects from increased banking dividends were nearly entirely counterbalanced by reductions from the mining sector, attributed to diminished mining profits due to lower commodity prices.

The report highlighted substantial dividend reductions from five notable companies: miners BHP (BHP.AX) and Rio Tinto (RIO.L), along with Petrobras (PETR4.SA), Intel (INTC.O), and AT&T (T.N). These cuts collectively contributed to a 2 percentage point decrease in the underlying global dividend growth rate for 2023.

However, the report also noted promising growth from a diverse range of industries such as vehicles, utilities, software, food, and engineering, underscoring the significance of maintaining a diversified portfolio.

Geographically, Europe (excluding the UK) played a pivotal role in driving growth, accounting for two-fifths of the global increase as dividends surged by 10.4% on an underlying basis, reaching $300.7 billion.
Global Corporate Dividends Achieve Record High of $1.66 Trillion in 2023Japan also made a substantial contribution, albeit somewhat tempered by a weak yen, according to the report. Although the United States made the most significant contribution to global dividend growth due to its sheer size, its 5.1% growth rate aligned closely with the global average.

Emerging markets dividends remained stagnant on an underlying basis, with Janus Henderson noting significant reductions in Brazil and lackluster growth in China. The firm forecasts another 5% growth in corporate dividends this year to reach $1.72 trillion.

Although the swift rise in bank dividends is anticipated to decelerate, Lofthouse suggested that rapid declines from the mining sector might also have a less pronounced impact.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

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