While investors question the impact of rising rates and fate of this market cycle, dividends tell quite a different story — one of stable earnings, synchronous global growth and improving corporate confidence, according to Janus Henderson’s Global Dividend Study.
“2018 has started well for dividends,” Ben Lofthouse, head of Global Equity Income at Janus Henderson, said in a statement. “Economic growth is strong, and corporate profitability is rising, generating cash that companies can return to their shareholders.”
The study finds that, after a strong showing in 2017, worldwide dividends continued to gain ground in early 2018. On a headline basis, payouts increased 10.2% to nearly $245 billion for the first quarter, a record improvement since the Janus Henderson Global Dividend Index was launched in 2009.
According to Lofthouse, the results are not entirely surprising.
“When earnings rise, as they have across a broad swath of sectors in most regions in the world, dividends follow,” he writes in the study’s report.
Another reason for the bolstered results is the fact that the index is based on U.S. dollars, according to Lofthouse. A weakening greenback accounted for about three percentage points of headline growth.
The study finds that nearly every region in the world hit a high-water mark for the first quarter. The only exception — Asia Pacific ex Japan — saw a decline in dividends because of stock-specific issues in Australia and lower special dividends in Hong Kong, not because of deteriorating fundamentals overall.