Global dividends hit third quarter record - $431.1 billion

• Global dividends reached a Q3 record of $431.1bn, up 3.1% year on year on both a headline and underlying basis.
• Large cuts from a few companies obscured stronger growth across the market.
• 88% of companies raised payouts or held them steady and median (or typical) dividend growth was 6.0%.
• China, India, and Singapore all saw record quarterly dividends, while US dividends rose by 10.0%, boosted by new dividend payers like Alphabet.
• Asia Pacific ex Japan saw declines in Australia, Taiwan, and Hong Kong.
• Banks and media companies (which include internet media) made the largest contributions to growth.
• No change to underlying growth expectation of 6.4% for 2024, but headline figure reduced slightly to $1.73 trillion (+4.2% year on year) owing to lower one-off special dividends.

Global dividends rose 3.1% to $431.1bn in Q3 according to the latest Janus Henderson Global Dividend Index, a record for the third quarter. Even so, the growth rate was relatively muted by comparison to recent quarters - the underlying increase was 6.6% in the first half of 2024.

Very large cuts from just five companies explain the apparent slowdown, and they obscured much stronger growth across the broader market. These cuts included Evergreen Marine in Taiwan and Glencore in the UK, and between them, they impacted the Q3 growth rate by 3.4 percentage points. Without these cuts, global growth would have been more than twice as fast at 6.5%, consistent with the first half and the expected outcome for the whole year. Equally, the median, or typical increase companies declared, was 6.0% in Q3. Globally, nine companies in ten (88%) increased their dividends or held them flat.

Unusually low special dividend payments also made an impact, holding back the headline growth rate by more than expected in Q3. They are volatile by nature, and so are stripped out of the underlying figures. Q3's underlying growth rate of 3.1% was in line with Janus Henderson's expectations.

China, India, and Singapore all saw record dividends paid during the quarter. Most of the growth in China came from Alibaba, which is distributing cash to shareholders for the first time this year; whereas in India, it reflected strong growth across a very broad range of companies. Elsewhere, the first year of dividends from internet media companies Meta and Alphabet added a significant boost to already strong growth in the US, where 96% of companies raised payouts or held them steady year on year. Growth here was 10.0% on an underlying basis.

In a seasonally important quarter for the region, payouts from Asia Pacific ex Japan were markedly lower, dragged down by weakness in Australia, Hong Kong, and Taiwan. Singapore bucked the trend thanks to large increases from its banks.

From a sector perspective, banks and media companies made the largest contribution to growth, while the mining and transport sectors had the biggest negative impact.

Given the lower level of Q3's one-off special dividends, Janus Henderson has trimmed its forecast for 2024 slightly to $1.73 trillion, a headline increase of 4.2% compared to 2023 (down from its previous estimate of 4.7% headline growth). There is no change in expectations for underlying growth of 6.4%.

Jane Shoemake, Client Portfolio Manager on the Global Equity Income team at Janus Henderson, said: "Concerns that higher interest rates might cause significant strain on the global economy have so far been misplaced. Companies report that it is getting easier to refinance debts and the banks are well capitalised and generating good returns, even as interest rates fall, with bad debts remaining under control. Company profitability in most parts of the world looks robust and implies that dividend growth can continue into 2025. Dividends in any case show more steady growth than profits over time as companies seek to manage payout ratios over the business cycle. It is in this context that apparently slower Q3 growth should be seen. We remain confident that underlying growth this year will be in line with the strong showing in the first half."

"More than one sixth of the underlying growth this year is coming from companies like Alibaba and Meta paying their first ever dividends, demonstrating how these relatively new sectors are maturing and beginning to return some of the very large amounts of cash they are accumulating to shareholders. Alphabet, for example, has $80.9 billion* of net cash on its balance sheet, despite having spent roughly $46.7 billion* on share buybacks and another almost $5 billion on dividends in the first nine months of this year alone, suggesting there is still room for dividends to increase significantly in the future."

*As of 30 September 2024.

There is no guarantee that past trends will continue, or forecasts will be realised. Past performance does not predict future returns. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.

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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 clients define and achieve superior financial outcomes through differentiated insights, disciplined investments, and world-class service.

As of September 30, 2024, Janus Henderson had approximately US$382 billion in assets under management, more than 2,000 employees, and offices in 24 cities worldwide. The firm helps millions of people globally invest in a brighter future together. Headquartered in London, Janus Henderson is listed on the New York Stock Exchange.

Source: Janus Henderson Group plc

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