Global dividend payouts break records

Investment firm Janus Henderson reported that underlying growth, the core measure of progress, was a “very rapid” 9.2 per cent year-on-year.

While underlying growth was 11.1 per cent in the UK due to strong payouts from the mining sector and British banks, led by Barclays, UK payouts across all sectors rose just three per cent to $33.3bn due to a weakening pound and lower special dividends.

Meanwhile, quarterly records were broken in the US, Canada, Taiwan and India, but Australia lagged well behind.

Chinese dividends grew for the first time in four years, according to the Janus Henderson Global Dividend Index.

US payouts jumped 9.1 per cent in headline terms to a record $120 billion.

Almost half of that increase was down to a $5.3 billion special dividend paid by Dr Pepper Snapple when it was acquired by Keurig.

Australian dividends were the weakest in the developed world. They inched ahead just 1.3 per cent on an underlying basis.

According to Ben Lofthouse, of Janus Henderson, the quarter exceeded expectations but, “more importantly, the quality of growth was better than expected”.

He said: “It came despite a negative impact from exchange rate moves and a lower level of special dividends. Importantly, our core underlying measure of growth was strong. 2018 may be a volatile and more challenging year for stock markets, but steady profit growth means dividends should continue to make steady progress.”

He added: “Expectations for corporate earnings growth in 2019 are starting to come under some pressure, given the late stage of the economic cycle.

“That is not to say that profits themselves are set to fall, however, rather that the pace of expansion may now be slower than previously thought.”