Wealth Design News

Despite a more challenging fourth quarter which saw equity markets plummet, global dividends rose by almost 10% in headline terms during 2018, with the Janus Henderson Global Dividend Index ending the year at a new record of 187.3. This means the world's companies paid their shareholders a staggering $638bn more in 2018 than in 2009, when the index was launched. On a core growth basis, the 2018 figure was equivalent to an increase of 8.5%, which is the best performance seen since 2015, and above the long-term trend of 5%-7%. Almost nine in ten companies around the world raised their pay-outs or held them steady during the period. Emerging markets, Japan and North America performed strongly, though Europe lagged behind, while 13 countries delivered record pay-outs, including Japan, the US, Canada, Germany and Russia. European dividends however, rose more slowly, up 5.4% on an underlying basis. They were held back by slow growth in Switzerland and a big cut from Anheuser Busch in Belgium.

Nonetheless, 90% of European companies increased their dividends with strong performance from Germany, France and Spain. Headline growth benefited strongly from positive exchange-rate effects earlier in the year. Looking at the year ahead, most commentators believe dividend growth is expected to be more in line with the long-term trend. Corporate profit expectations have fallen as global economic forecasts have been revised down, although most observers still expect companies to deliver positive earnings growth in 2019. Dividends, afterall, are much less volatile than earnings.