Historic Dividend High: Global corporate dividends reached an all-time high of $1.66 trillion in 2023, with record payouts by banks driving half of this growth, according to a report released on Wednesday.

The quarterly Janus Henderson Global Dividend Index (JHGDI) report disclosed that 86 per cent of listed companies worldwide either augmented dividends or maintained them, projecting further growth to $1.72 trillion in dividends for the current year.

Leading the pack in dividend distributions for 2023 were Microsoft, Apple, and Exxon Mobil.

2022 to 2023

The total value of corporate dividends surged from $1.57 trillion in 2022, with underlying growth of 5 per cent factoring in currency fluctuations, special dividends, timing variances, and index changes, according to UK asset manager Janus Henderson.

Ben Lofthouse, head of global equity income at Janus Henderson, attributed the robust dividend performance to strong corporate cash flow across most sectors, providing ample resources for dividends and share buybacks.

The banking sector witnessed a notable surge in dividends, totaling a record $220 billion in 2023, marking a 15 per cent increase from the previous year, buoyed by high interest rates that boosted bank margins.

Mining sector declines

However, the mining sector experienced major dividend cuts, primarily due to lower commodity prices, with notable reductions from major players such as BHP, Rio Tinto, Petrobras, Intel, and AT&T, impacting the global dividend growth rate for 2023.

Geographically, Europe (excluding the UK) and Japan emerged as major contributors to global dividend growth, with Europe witnessing a 10.4 per cent rise in payouts to $300.7 billion on an underlying basis.

The United States, although making a substantial contribution to global dividend growth due to its sheer size, saw a growth rate in line with the global average at 5.1 per cent.

Emerging markets dividends remained stagnant on an underlying basis, with sharp cuts in Brazil and lackluster growth in China, according to Janus Henderson.

Corporate dividend forecast

Looking ahead, Janus Henderson predicts another 5 per cent growth in corporate dividends for the current year, with expectations that the rapid increase in bank dividends may ease, while declines from the mining sector could be less pronounced due to steady energy prices and resilience in defensive sectors like healthcare and consumer goods.

(With Reuters Inputs)