Q3 dividends slip to $422bn, but Europe on for record

Global dividends fell slightly in the third quarter of 2023, declining 0.9% to $421.9 billion on a headline basis.

But dividends in Europe jumped 22.9% on an underlying basis during the quarter, leaving the continent comfortably on track to deliver record distributions this year.

That’s according to the latest Janus Henderson Global Dividend Index report, which analyses dividends paid by the world’s 1,200 largest firms by market capitalisation.

“The third quarter sees relatively few European dividends paid, but the strong growth seen in the second quarter continued in the third …” said the report.

“There was just one cut among companies in our index with Swiss chemicals company Ems-Chemie making a small reduction due to falling profits.”

On Q3 dividends in France, the report said: “11.6% underlying growth was slower than the regional average but comfortably ahead of the global average.

“Publicis made the strongest contribution to growth, followed by Pernod Ricard. The advertising group benefited from a positive revenue mix as well as new contracts, while the beverages company saw strong sales growth and an improving margin.

“Based on dividends already announced for the fourth quarter, France is on track to see record payouts this year.”

On Netherlands, the report said: “Dutch dividends jumped by 18.9% on an underlying basis — three quarters of the growth came from ING, which doubled its payout year-on-year.

“The bank has a rigid dividend policy and had made a small cut in its final dividend for 2022, paid in Q2 2023, but strong interest income has enabled it to make a significant increase to its interim payment.

“Most Dutch companies made double-digit increases.”

On Switzerland it said: “Two Swiss companies in our index paid a dividend, with an increase from Richemont more than offsetting a cut from Ems-Chemie. Underlying growth was 7.5% once the recent strength of the Swiss franc was taken into account.”

On Scandinavia: “Each country only saw one payment during the quarter from the companies in our index but growth was strong.

“Denmark’s Novo Nordisk increased its dividend by two fifths, reflecting strong sales and profits, while Norway’s Equinor continues to profit from high oil prices.

“In Finland, Nokia hiked its quarterly dividend by half, though it remains below pre-pandemic highs. Sweden’s Telia has moved to quarterly payments so the payment that appeared in Q3 is simply a calendar effect.”

On Italy: “Only two companies in our index pay dividends in Q3, Eni, the oil company and Enel the utility.

“Between them they delivered 4.2% underlying growth. Per-share dividend increases were higher than this, but Eni’s share buyback programme meant the total distributed did not keep pace with the per-share dividend increase the company announced.

“Prospects for Q4 are positive and may mean record payouts from Italy this year.”

On Spain: “Utilities dominate Spain’s third-quarter dividends, and they helped push the total up 20.1% on an underlying basis.”

On Germany: “Porsche was the only German company in our index to pay a dividend in the third quarter, its first as a listed company.”

On global dividends, the report said: “Q3 marks the seasonal high in Asia Pacific ex Japan and payouts in the region fell sharply due to cuts from Australian mining groups, Taiwanese steel and plastic manufacturers and Hong Kong property companies …

“US dividend growth slowed to 4.5% but 98% of companies increased or held payouts steady …

“Q3 is a quiet period for Europe but dividend growth there remained very strong …

“In the UK, growth from banks, oil producers and utilities offset cuts from the mining sector …

“In emerging markets, oil dividends propelled China to a new record, but Brazilian payouts fell by two thirds …”

On the outlook for the full year, the report concluded: “2023’s headline forecast is slightly reduced from $1.64 trillion to $1.63 trillion, owing to weaker special dividends and a strengthening dollar; this equates to headline global dividend growth of 4.4% year-on-year.”