Companies around the world groomed their shareholders in the first quarter. The amount of dividends paid to shareholders reached a new global record in the first quarter. Payouts to investors rose 11% to $302.5 billion in the first three months of the year, a record for this “traditionally calmer” period, according to a report by asset manager Janus Henderson.
This “generosity” of companies is explained in particular by the vigor of the oil and mining sectors but also by the post-Covid-19 economic recovery. It remains to be seen whether the war in Ukraine, the surge in inflation, the shortage of raw materials or even the rise in interest rates in the world will modify this momentum? According to Janus Henderson, the impact should be limited.
“These challenges also mean greater uncertainty that is likely to affect business decision-making. The impact on dividends is likely to manifest beyond 2022 but it is important to remember that dividends are much less volatile than earnings,” according to a portfolio manager at Janus Henderson. And according to the projections of this study, 1,540 billion dollars should be paid to shareholders, “an increase of 4.6%” compared to 2021, which was already a record year.
The oil and mining industries stand out
This report shows that “payments have more than doubled” since 2009, when the study was created, which measures the evolution of dividends paid by the 1,200 largest market capitalizations. And despite the war in Ukraine, 94% of multinationals increased their dividends or maintained them, details the study. In the United States, this ratio was the strongest at 99% against 90% a year earlier.
These remittances in all regions of the world recorded double-digit growth but “notable weakness was however seen in parts of Asia, such as Hong Kong, where the confinements continue to weigh on the economy”.
In Europe, Denmark’s dividends were much larger than usual due to an almost eightfold increase in the annual dividend of shipping group Moller-Maersk “which benefits from the disruption of global supply chains”. Its $7.2 billion first-quarter dividend is the largest since 2015 and “will likely be one of the 30 largest paid out this year.”
All sectors recorded increases but the oil industries, where dividends rebounded by a third during the first quarter, and mining stand out. Mining companies, whose payouts to shareholders jumped 29.7%, “will continue to make a strong contribution to growth in 2022, potentially paying out more than $100 billion in dividends for the first time,” says Janus Henderson. . The Anglo-Australian mining giant BHP is “on track to become the world’s biggest dividend payer in 2022, for the second year in a row”, adds the asset manager.