Global dividends continue march toward pre-Covid levels

Companies are restoring investor payouts rapidly as the spectre of the Covid crisis over their future prospects recedes, according to fresh figures released today.

Data from Janus Henderson shows global dividends surged 26.3 per cent to $471.7bn in the second quarter of this year on an annual basis.

Companies that halted dividends to protect cash flow after absorbing severe income hits during the height of the Covid crisis drove the recovery.

Dividends are now just 6.8 per cent below their pre-Covid levels, Janus Henderson said.

84 per cent of companies upped investor payouts or kept them steady compared to the second quarter of last year.

Jane Shoemake, client portfolio manager at Janus Henderson, said: “Just as the impact of the pandemic on company dividends has been consistent with a conventional but severe recession, so the recovery is also consistent with the rapid economic bounce-back now occurring in those parts of the world where vaccination programmes are enabling economies to reopen.”

“Households have record savings and there is pent-up demand to spend which should be good for company profits.”

Janus Henderson increased its forecast for total dividends in 2021 from its previous projections in May to $1.39 trillion.

UK and EU dividends recorded the strongest growth rates in the second quarter, rising 60.9 per cent and 66.4 per cent respectively.

Meanwhile, North American dividends rose five per cent and in Japan, investor payouts inched up by just 0.4 per cent.

Ben Lofthouse, head of global equity income at Janus Henderson, said: “As the global economy rebounds, the broad recovery in dividends makes it possible for investors once again to have a wide spread of sectors that are generating income, diversifying the risk of stock and sector specific issues.”