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Henderson International Income Trust – 2022 Global Dividend Cover Report
This year’s edition of Henderson International Income Trust’s Global Dividend Cover Report shows how the world’s companies face tougher economic times, but they entered 2022 with their dividends better supported by profits, cash flow and balance sheets than they have been for more than 10 years.
31 Oct 2022
2 minute read
2 minute read
Key takeaways:
Profits
- Global profits jumped 78% in 2021 to a new record of £2.85 trillion.
- Profit rebound led by oil and financial companies, but all sectors and almost every country saw growth.
- Forecast: 2022 profits set to reach record £3.03 trillion.
- Companies face 2023 slowdown from a position of strength.
Dividends
- Global dividends leapt 21.7% to a record £1.10 trillion in 2021, boosted by post-pandemic catch-up.
- H1 2022 global dividends jumped a further 19.1%.
- Forecast: H2 2022 dividends will rise more slowly as catch-up effects fade, but we could see record pay-outs of £1.25 trillion for the full year.
Dividend cover
- Dividend cover was the strongest since 2011 in 2021 at 2.6x.
- US, UK and Europe have seen the strongest rise in cover and most sectors saw improvement.
- Dividend cover is high measured against both profits and cash.
- Forecast: Dividend cover will dip slightly in 2022, but remains above the historic average – good news as the economy slows.
Watch out for yield traps
- One company in eight is a yield trap – no increase compared to 2021.
Viewpoint
- Ben Lofthouse: Income is vital in a time of economic uncertainty, and the ability of dividend income.
International Income Trust article
Income article
Glossary
Yield Trap – A yield trap, sometimes referred to as a dividend trap, is when a stock’s yield is too good to be true when compared to similar companies or to the wider market. If you get caught in a yield trap, you may find the income you hoped for is cut or the underlying business is challenged. This eliminates one of the many advantages of investing in equities, which is for dividends to grow over time.
Related insights
31 Oct 2022
2 minute read
2 minute read
Key takeaways:
Profits
- Global profits jumped 78% in 2021 to a new record of £2.85 trillion.
- Profit rebound led by oil and financial companies, but all sectors and almost every country saw growth.
- Forecast: 2022 profits set to reach record £3.03 trillion.
- Companies face 2023 slowdown from a position of strength.
Dividends
- Global dividends leapt 21.7% to a record £1.10 trillion in 2021, boosted by post-pandemic catch-up.
- H1 2022 global dividends jumped a further 19.1%.
- Forecast: H2 2022 dividends will rise more slowly as catch-up effects fade, but we could see record pay-outs of £1.25 trillion for the full year.
Dividend cover
- Dividend cover was the strongest since 2011 in 2021 at 2.6x.
- US, UK and Europe have seen the strongest rise in cover and most sectors saw improvement.
- Dividend cover is high measured against both profits and cash.
- Forecast: Dividend cover will dip slightly in 2022, but remains above the historic average – good news as the economy slows.
Watch out for yield traps
- One company in eight is a yield trap – no increase compared to 2021.
Viewpoint
- Ben Lofthouse: Income is vital in a time of economic uncertainty, and the ability of dividend income.