At the end of 2023, the global volume of dividends paid reached a record $1.7 trillion

The investment consulting company Janus Henderson estimated that at the end of 2023, companies around the world paid dividends to shareholders totaling $1.66 trillion – this was an absolute record. A total of 86% of public companies decided to increase dividends to their shareholders last year. Dividends paid reached record levels in 22 countries, and Europe showed the largest increase in payments of any region in the world.

Released today report Global Dividend Index researchers Janus Henderson note that the total volume of dividends paid worldwide in 2023 increased by 5% compared to the previous year and reached an absolute record of $1.66 trillion. In the fourth quarter, the growth was even more noticeable – 7.2% compared to the fourth quarter of 2022. It is noted that almost half of the dividends paid in the world came from the banking sector. This happened thanks to high discount rates, which brought banks solid profits and allowed them to allocate more funds for dividends. In addition, leading US banks, including JPMorgan Chase, Wells Fargo and Morgan Stanley, successfully passed the Fed’s stress tests last year, after which they decided to distribute additional funds to shareholders in accordance with the regulator’s recommendations.

Among the companies in the non-banking sector that significantly increased their dividends last year were Microsoft, Apple and Exxon Mobil.

“Free cash flow remains very stable across most sectors,” says Ben Lofthouse, head of equity research at Janus Henderson. “This has allowed many companies to turn up the heat on dividend payouts and share repurchases.”

The “main driver” of dividend growth last year named Europe – payments there increased by 10.4% (to $300.7 billion), which is the best dynamics among all regions of the world. In total, 22 countries around the world recorded an overall increase in dividends, including the US, France, Germany, Italy, Canada, Mexico and Indonesia.

Among the large companies that did not raise dividends last year and even reduced them, Janus Henderson researchers name mainly companies in the mining sector (BHP, Rio Tinto) and some companies in the technology and telecommunications sector (Intel, AT&T). Researchers attribute this to the weak results of specific companies last year.

This year, Janus Henderson expects dividend payments to rise again to a new record of $1.72 trillion.

“Energy prices remain at a stable level, which will enable oil companies to maintain high dividends. We expect that companies operating in such core consumer sectors as pharmaceuticals and medicine, food and consumer goods will also be able to show good progress,” the researchers note.

Evgeny Khvostik