Global company dividends rose to a new record of $1.43 trillion in 2019, up 3.5% on a headline basis, according to the latest Janus Henderson Global Dividend Index.
“The underlying growth rate, which adjusts for 2019’s stronger US dollar, unusually high special dividends and other technical factors was 5.4% and was driven by North America, emerging markets and Japan,” said the report.
“New annual records were set in the US, Canada, Japan, Russia and France.
“Even so, the more challenging global economic backdrop meant 2019 saw the slowest rate of growth since 2016, with Asia Pacific ex Japan, the UK and Europe ex UK all lagging behind the global average.
“From a sector perspective, the fastest growth came from the oil sector, with dividends rising by a tenth, while telecoms saw payouts fall.
“The fourth quarter continued the trend seen through the rest of the year, although there was some loss of momentum in the rate of growth in North America related to a slowdown in earnings growth.”
For 2020, Janus Henderson expects headline growth to be held back by lower special dividends, but still expect dividends totalling $1.48 trillion, 3.9% higher than 2019.
Ben Lofthouse, co-manager of Global Equity Income at Janus Henderson said: “With the exception of a few specific sectors, the pace of earnings growth slowed across the world in 2019 as the global economy lost some momentum.
“This has inevitably driven a reduction in the pace of dividend growth, after a particularly strong two years.
“But there is still growth.
“The underlying 5.4% increase witnessed in 2019 was in line with the longer-term trend and highlights the resilience of dividends when economies face headwinds.
“Moreover, taking a global approach to income enables investors to take advantage of the benefits of both geographical and sectoral diversification.
“For the year ahead, the market expects the global economy and company profits to continue to expand, meaning dividends can grow further.
“2020 is on track to deliver the fifth consecutive year of record dividends.”