Global dividends reached a Q3 record of $431.1 billion
Global dividends rose to $431.1 billion in Q3 2024, a record for the third quarter. Given the lower level of Q3 one-off special dividends, we have trimmed our headline forecast slightly, however, the forecast for underlying dividend growth of 6.4% in 2024 is unchanged.
30 minute read
Key takeaways:
- Global dividends reached a Q3 record of $431.1 billion, up 3.1% year on year. Large cuts from a few companies obscured stronger growth across the market, with 88% of companies raising payouts or holding them steady.
- Special dividends were weaker than Q3 2023 but the underlying picture was in line with our expectations.
- We have reduced our estimate for special dividends and this impacts our 2024 headline forecast by 0.5 percentage points; we nevertheless expect $1.73 trillion to be paid in 2024, up 4.2% year on year.
The Janus Henderson Global Dividend Index (JHGDI) is a quarterly, long-term study into global dividend trends. The index measures the progress global firms are making in paying their investors an income on their capital.
Global dividends rose to $431.1 billion in Q3 2024, a record for the third quarter. After a very strong second quarter, the underlying increase was just 3.1% on an underlying basis in Q3 year on year, broadly in line with our expectations. The headline growth rate was also 3.1%, a bit below our expectations, owing to lower one-off special dividends.
The big picture obscured much better growth across the broad mix of companies in our index. Very large cuts from just five companies, out of the more than 700 in our index that made Q3 payments, impacted the global growth rate by 3.4 percentage points. Without these, global growth would have been more than twice as fast at 6.5%, consistent with the outcome we expect for the whole year. Equally, the median, or typical increase companies declared was 6.0% in Q3.
China, India and Singapore all saw record dividends paid during the quarter. 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.
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. Globally nine companies in 10 (88%) increased their dividends or held them flat.
Special dividends fell sharply year on year, falling by a third to $6.3bn, around half the long-run quarterly average. Their one-off nature means they are by definition unpredictable and the total paid came in around $5.5bn lower than we had anticipated, knocking just under a percentage point off the Q3 headline growth rate.
2024 Forecast
Given the lower level of Q3 one-off special dividends, we have trimmed our forecast for 2024 slightly to $1.73 trillion, a headline increase of 4.2% compared to 2023 (down from our previous estimate of 4.7%). We make no change in our expectation for underlying growth of 6.4%.
Andrew Jones, Portfolio Manager on the Global Equity Income Team, said:
“Concerns that higher interest rates might cause significant strain on the global economy have generally ebbed away. 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.”
Note: Unless otherwise stated, all data is sourced by Janus Henderson Investors as of 31 October 2024. Nothing in this document should be construed as advice. Headline dividends – The sum total of all dividends received. Underlying dividends – Headline dividends adjusted for special dividends, change in currency, timing effects and index changes.
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Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
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30 minute read
Key takeaways:
- Global dividends reached a Q3 record of $431.1 billion, up 3.1% year on year. Large cuts from a few companies obscured stronger growth across the market, with 88% of companies raising payouts or holding them steady.
- Special dividends were weaker than Q3 2023 but the underlying picture was in line with our expectations.
- We have reduced our estimate for special dividends and this impacts our 2024 headline forecast by 0.5 percentage points; we nevertheless expect $1.73 trillion to be paid in 2024, up 4.2% year on year.