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August 21, 2014 at 01:22 PM
Dividends increased almost 12% in the second quarter, according to a report released Monday by Henderson Global Investors. The firm’s Global Dividend Index, which tracks global dividend trends, found overall payouts increased 11.7% to nearly $427 billion.
The index itself is up over six points to 157.8 as of the end of March, up almost 58% over 2009, the base year of the index.
Developed markets are the primary drivers of that growth, Henderson noted, especially the United States. After a “stellar” first quarter, U.S. dividends grew almost 14%, increasing in every sector except mining. In the first half of the year, payouts reached $176 billion, up over 21%.
Europe also experienced significant dividend growth, although Henderson noted companies there typically pay dividends in the second quarter. Payouts increased 18% to $153 billion.
Japan enjoyed a “record quarter,” according to Henderson, increasing dividends by over 18% to $25 billion.
On the other hand, emerging market dividends fell almost 15% in the second quarter. Henderson attributed the drop to index changes and lower exchange rates.
Henderson found the first half of 2014 experienced the fastest dividend growth for a six-month period since 2011, increasing 18.4%. However, in 2011, most of that growth was the result of a weak dollar. This year, companies have been raising dividends with a “small favorable contribution” from a stronger dollar.
“In 2011, more than a third of the growth came from a falling U.S. dollar,” Alex Crooke, head of global equity income at Henderson Global Investors, said in a statement. “Developed markets are leading the charge, and we expect that to continue. It’s especially encouraging to see Europe and Japan delivering big increases to their shareholders, after lagging behind the rest of the world recently.”
