- Higher payments from banks and financials drove US dividends up 6.7% on an underlying basis in the third quarter
- Pharmaceuticals, technology and retail were significant contributors to US dividend growth
- 96% of US companies increased dividends or held them steady during the quarter
- Globally, surging oil profits drove dividends to $415.9bn, also a record for Q3
US dividends increased 6.7% on an underlying basis to a new all-time high of $146.2bn during the third quarter of 2022, according to the latest Janus Henderson Global Dividend Index. For the second consecutive quarter, financials made the largest contribution to dividend growth, accounting for almost two-fifths of the underlying increase.
Globally, soaring energy prices fuelled a significant increase in dividends during the quarter, as oil companies distributed record profits to shareholders. The global total paid rose by 7.0% on a headline basis to $415.9bn, easily a record for the third quarter. The underlying increase was 10.3% once the strength of the dollar and other factors were taken into account. Globally, 90% of companies raised dividends or held them steady, slightly below the 94% recorded in the first half of the year.
Surging oil dividends offset a slump in mining payouts
Oil companies all over the world hiked their payouts, largely via special dividends rather than an increase in their regular payments. Oil dividends were particularly strong in emerging markets, Asia and North America with the biggest increase coming from Petrobras in Brazil.
The encouraging third quarter has prompted a $30bn upgrade in Janus Henderson’s full-year headline figures, driven mainly by higher one-off special dividends, strength in the oil sector and in Asia. Janus Henderson now expects headline dividends of $1.56 trillion1, up 8.3% year-on-year. Underlying growth is set to be 8.9%, an increase of 0.4 percentage points compared to Janus Henderson’s expectations three months ago and still firmly ahead of the 5-6% longer-term dividend growth trend.
Matt Peron, Director of Research at Janus Henderson said: “Given the challenges facing investors in 2022, record high dividend payments are a rare silver lining for those who rotated assets into dividend paying stocks in defensive sectors. Looking ahead to 2023, slower economic growth is likely to impact dividend payments globally. However, in the US, dividend payments tend to rise and fall far less than other parts of the world, as demonstrated during the depths of the COVID-19 lockdowns, which is welcome news for income investors.”
Notes to editors
Our headline growth rate describes the change in the total dollar amount paid by companies compared to the corresponding quarter each year. Our underlying figure adjusts for the distortion that can be caused by one-off special dividends, changing exchange rates, the effect of companies entering and leaving the global top 1,200 that comprise our index and the impact of changes in payment dates. The latter two tend to be negligible over the course of a whole year at the global level, though they can have a greater impact in any one quarter, geography or sector.
About Janus Henderson
Janus Henderson Group is a leading global active asset manager dedicated to helping investors achieve long-term financial goals through a broad range of investment solutions, including equities, fixed income, multi-asset, and alternative asset class strategies.
At 30 September 2022, Janus Henderson had approximately US$275 billion in assets under management, more than 2,000 employees, and offices in 23 cities worldwide. Headquartered in London, the company is listed on the NYSE and the ASX.
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1 Janus Henderson has removed all Russian companies from the index and restated all historic data. Russian companies have only contributed 1.5% to global payouts over the last decade consequently the long-term impact is small.
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