Global dividends surge to a new record in Q2

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 income investors enjoyed a very strong second quarter of 2024. Payouts rose 5.8% on a headline basis to an all-time record of US$606.1 billion, according to the latest Janus Henderson Global Dividend Index report. Underlying growth was even stronger at 8.2% once the drag caused by exchange rates, especially the weak Japanese yen, was taken into account.

Banks were the key driver of Q2 dividend growth

Banks once again were the most important driver of higher payouts, accounting for one third of the underlying increase year-on-year. European banks were the main contributors, but the trend was evident globally. Insurers, vehicle manufacturers (especially in Japan) and telecoms were also important contributors to growth in Q2.

Headline vs. underlying

Special dividends of US$13.3 billion were only a little larger in Q2 than in the same period in 2023; this gave a modest boost to the headline growth rate. The largest single payout came from HSBC, following the sale of its Canadian operation – at US$4 billion, it comprised almost a third of the total. Hermes was also a significant contributor.

This modest boost was more than offset by exchange rates, which held back the headline growth rate by 1.5 percentage points in Q2. More than half of this effect came from Japan, where the yen has fallen sharply against the US dollar. Europe made up most of the rest.

2024 Forecast

After a strong second quarter, and to allow for the strong contribution dividend newcomers will make this year, we are upgrading our forecast for 2024’s dividends. We now expect companies around the world to distribute US$1.74 trillion, up 6.4% compared to 2023 on an underlying basis (up from 5.0% at the time of our last report) and equivalent to a headline increase of 4.7% (up from 3.9%).

Jane Shoemake, Client Portfolio Manager on the Global Equity Income Team, said:

“We had optimistic expectations for the second quarter, and the picture was even brighter than we predicted. Around the world, economies have generally borne the burden of higher interest rates well. Inflation has slowed while economic growth has been stronger than anticipated, and companies have proved resilient and in most industries continue to invest for future growth.

After a strong second quarter, and to allow for the strong contribution dividend newcomers will make this year, we are upgrading our forecast for 2024’s dividends.”

Read the full report

Unless otherwise stated, all data is sourced by Janus Henderson Investors as of 30 June 2024. Nothing in this document should be construed as advice.