Western companies allocated record amounts for dividends and share buybacks in the first quarter – Kommersant

By data research company Janus Henderson, in the first quarter, the total amount of funds allocated by companies to pay dividends worldwide increased by 12% compared to the same quarter last year, reaching a record $327 billion. American companies sent the most funds to pay dividends – $153 billion In Europe, the volume of funds amounted to $60 billion, of which 75% came from companies from Denmark, Germany and Switzerland.

Experts note that those companies that still managed to earn in the difficult macroeconomic conditions of the first quarter prefer to use free funds for dividends, rather than invest them in business expansion or mergers and acquisitions due to ongoing economic and geopolitical uncertainty.

Ben Lofthouse, Head of Capital Markets at Janus Henderson, said: “The global economy is slowing as inflation and higher interest rates weigh on demand. This situation has already led many companies to exhaust the growth opportunities that appeared immediately after the end of the pandemic at this stage. Fortunately, dividends are less volatile than earnings at this time.”

At the same time, according to the calculations of another research company, Birinyi Associates, cited by The Wall Street Journalthe largest US companies included in the Russell 3000 Index, have announced more than $600 billion in buybacks of their shares from the market since the beginning of the year. This is already half of the total buybacks for the whole of last year ($1.27 trillion), which became record.

If such dynamics continue until the end of the year, 2023 may set a new record. However, such tactics of companies are already causing discontent of the authorities. Back in the fall, US President Joseph Biden subjected criticism American oil corporations, which use billions of free funds to buy back their shares from the market, instead of spending them on investments in the development of production and production in the United States.

Evgeniy Khvostik