Global company dividends climbed to a first-quarter record of $339.2 billion, according to the latest Global Dividend Index from Janus Henderson.
The firm has made no change in its 2024 forecast for total dividends of $1.72 trillion.
“Strong underlying growth of 6.8% was the key driver of progress, though the headline total rose more slowly (2.4%) owing to lower one-off special dividends,” said Janus Henderson.
“Special dividends were still relatively high compared to most previous first quarters – the decline this year was simply from an exceptionally high base in Q1 2023, influenced by just two companies.
“Globally, 93% of companies that make a Q1 payment either raised their dividends or held them steady.
“Q1 is seasonally quiet in many parts of the world, but first-quarter records were broken in Sweden and Canada, while US payouts reached an all-time record high.
“Two very large companies, Meta and Alibaba, paid their first ever dividends, boosting the global Q1 total by 1.2 percentage points.”
US dividend growth accelerated in the first quarter, rising to an all-time quarterly record of $164.3 billion, up 7% on an underlying basis.
The restoration of Walt Disney’s payout after the pandemic, and the first Q1 dividends from Meta and T-Mobile were the main factors behind the acceleration in US payouts.
“The first quarter is seasonally quiet in Europe and dominated by Switzerland, where payouts fell in Swiss franc terms – every Swiss company in our index increased its per share dividend but very large share buybacks (eg Novartis bought back 5% of its shares in 2023) exceeded dividend growth rates,” said Janus Henderson.
“Danish shipping group Moller Maersk made a very large cut, and this helped bring the European total down in Q1. However, we expect the seasonally important second quarter to show solid growth in Europe.
“In Asia, a cut from BHP in Australia masked better growth from the wider region, while strong local currency growth in Japan was obscured by the weak yen. In the UK, most companies delivered flat or low single-digit increases.”
Banks accounted for a quarter of global growth in Q1, up by 12%.
The first quarter was broadly in line with Janus Henderson’s expectations and the rest of the year continues to promise steady progress.
Jane Shoemake, Client Portfolio Manager on the Global Equity Income team at Janus Henderson, said: “Investors have enjoyed a strong start to 2024, with share prices rising globally and dividend growth continuing to show the strong underlying momentum reached towards the end of 2023.
“We have reasonable visibility over payouts in the crucial second quarter, which sees seasonal peaks in Europe, Japan and the UK.
“While a very small handful of large companies have announced significant dividend cuts, including Australian energy company Woodside, Bayer, the German chemicals company and UK listed mining group Glencore, the broad picture is one of continued resilience, especially in Europe, the US and Canada,
“Beyond the broadly positive picture around the world, the first distributions from Meta and Alibaba will also add almost half a percentage point to global growth this year between them.
“Companies like these are recognising that paying dividends is an important route – beyond share buybacks – to return capital to their investors.”