A growth of global dividends in Q3 and the return of the payments a pre-pandemic levels within this year. These are two of the most important trends that emerged from the analysis released by Janus Henderson on the trend of dividends and the scenarios of the world economy, which, net of some criticalities, seems to be going through a very positive phase overall.
The focus on dividends
According to the latest Janus Henderson Global Dividend Index, i global dividends I am in quick recovery post-pandemic. Thanks to higher profits and strong balance sheets, distributions increased at a record rate of 22% yoy on underlying basis in the third quarter of 2021, hitting an all-time high of US $ 403.5 billion in the quarter. The total rose by 19.5% in overall terms. Janus Henderson’s dividend index is now just 2% below the pre-pandemic peak reached in the first quarter of 2020. 90% of companies worldwide have increased or confirmed dividends. This result is the strongest since the launch of the Index and reflects the rapid normalization of dividend developments in the face of continued global recovery.
Forecasts for 2022
The exceptional strength of the data of the distributions In the Q3, in combination with the perspectives best for the Q4, prompted Janus Henderson to revise the forecasts for the full year upwards. Janus Henderson now expects overall growth of 15.6%, set to bring 2021 distributions to a new record of US $ 1.46 trillion. Janus Henderson expects global dividends to recover in just nine months from the low reached at the peak of the pandemic in the year ending March 2021. For 2021, underlying growth of 13.6% is expected.
Future opportunities
The increases of the prices from the commodity have translated into record profits for many extractive companies: over two-thirds of the y / y growth in global distributions in Q3 came from this sector. Three quarters of the extractive companies in the Janus Henderson index have at least doubled their dividends compared to Q3 2020. In Q3 alone, the sector generated extraordinary dividends of US $ 54.1 billion, higher than the record recorded in the previous financial year in 2019; BHP will distribute the world‘s largest dividends in 2021.
The situation in the various areas
the areas geographic most penalized in the 2020 and those most exposed to boom of the sector extractive or at the resumption of bank dividends have experienced a rapid recovery. Australia and the UK are among the biggest beneficiaries of these trends. Europe, parts of Asia and emerging markets also reported notable increases on an underlying basis. Areas of the world, such as Japan and the United States, where companies had not experienced significant cuts in 2020, naturally showed less growth than the global average. Nonetheless, dividends from US companies rose by one-tenth to a new high in Q3. The strength of the third quarter also allows Chinese companies to be on track to make record deployments in 2021.