Dividend increase for global shareholders

In a demonstration of rising corporate profitability, many shareholders saw an increase in dividends as global payouts hit a record high at the start of the year.

Investment firm Janus Henderson1 revealed that global dividend payouts rose over 10% to $244.7bn, making it a record-breaking Q1 for shareholders across the globe. Dividend payments to shareholders in the UK in the first quarter of the year grew by over 21% to $18.7bn (£16.4bn) from $15.4bn (£13.5) in Q1 last year. This figure was elevated by a host of factors, including a hike in dividends by mining firms, a special dividend from Sky, the addition of new companies to the index and British American Tobacco’s first quarterly dividend. Adjusted underlying growth, taking these factors into account, was a more modest 4.2%.

In the US, underlying dividend growth was 7.6%, boosted by President Trump’s corporate tax cuts.

In the first three months of the year, dividend payments by US companies totalled $113bn, 5.2% higher than Q1 2017 payouts. Financial, healthcare and technology stocks recorded the highest growth. Shareholders have benefited as corporate profitability has risen and companies return some of the cash they have accumulated via dividends.

Dividend growth in Japan topped 8.2% (underlying basis), whilst Continental Europe registered dividend growth of 3.9%. The research forecasts global payouts will rise by 6% to $1.36tn this year.

1Janus Henderson, Global Dividend Index, May 2018