UK shareholders see dividends rise 4.2% as global payouts hit record


UK shareholders saw a sharp increase in dividends at the start of the year as global payouts hit a new record high, new data show.

Dividend payments to shareholders in the UK grew by a whopping 21.1 per cent to $18.7billion (£16.4billion) from $15.4billion (£13.5billion) in the same period last year, according to investment firm Janus Henderson.

However, this figure was heavily distorted by British American Tobacco, which paid its first ever quarterly dividend this year, after switching from semi-annual payments. 

Dividends: Shareholders around the world saw record payouts in the first quarter

Dividends: Shareholders around the world saw record payouts in the first quarter

Dividends: Shareholders around the world saw record payouts in the first quarter

It was also lifted by a stronger pound, the addition of new companies to the index and a special dividend from Sky, the report said.

Once adjusted for these effects, underlying growth was a more modest 4.2 per cent. 

That’s higher than the 3.9 per cent growth seen by shareholders in Europe, but lower than in the US, where investors saw an 8 per cent increase in payouts, and Japan, where dividend growth was 8.2 per cent.

Mining giant BHP Billiton was one of the largest contributors to the increase in payouts in the UK, as miners have continued to hike dividends amid a rebound in commodities prices over the past year.

It comes as the report revealed a record-breaking first quarter for shareholders across the world, with total global dividend payouts soaring 10.2 per cent to $244.7billion.

Global dividends: The UK outpaced the rest of Europe

Global dividends: The UK outpaced the rest of Europe

Global dividends: The UK outpaced the rest of Europe

This headline figure was flattered by a weaker dollar in the first quarter, which means that payments from companies outside the US in other currencies were translated at more favourable exchange rate.

Underlying growth – adjusted for currency movements, special dividends, timing changes and index changes – was lower at 5.9 per cent.

The global increase was partly down to dividend payments rising to new records in the US on the back of President Donald’s Trump recent cuts to corporate tax.

US companies bumped up dividend payments by 5.2 per cent to a record $113billion on a headline basis in the first quarter, with tech, financial and healthcare stocks recording the biggest growth.

World’s top 20 dividend payers 

1. Novartis

2. Roche Holding

3. Royal Dutch Shell

4. Siemens

5. Nordea Bank

6. Exxon Mobil

7. Microsoft

8. Apple

9. AT&T

10. BHP Billiton

11. Verizon

12. Astrazeneca

13. Pepsico

14. Johnson & Johnson

15. Chevron

16. First Abu Dhabi Bank

17. Pfizer

18. BP

19. JP Morgan Chase

20. Wells Fargo

Source: Janus Henderson global dividend index

Shareholders in European companies saw a more modest payout growth of 3.9 per cent as Swiss pharma companies, which dominate the region, returned less or nothing at all to investors.

Switzerland accounts for more than a third of dividend payments in Europe as it’s home to the two largest payers in the world – drugs companies Novartis and Rocher.

The two firms, however, only made ‘very small increases’ in dividends, according to the report, while Teva – the world’s largest maker of generic drugs, cancelled its first-quarter payout altogether.

Asia Pacific, with the exception of Japan, was the only region not to see an increase, due to sharply lower special dividends in Hong Kong, and dividend cuts in Australia.

Janus Henderson forecasts global payouts will rise by 6 per cent to $1.36trillion this year in underlying terms. 

Its ‘global dividend index’ ended the quarter at a record 174.2, meaning that global payouts last year were almost three-quarters higher than in 2009, the report said.

Ben Lofthouse of Janus Henderson said 2018 had started well for dividends amid as corporate profitability is rising.

He said: ‘The Q1 acceleration in US dividend growth may be an early sign that companies are feeling confident about returning some of the cash they have accumulated to shareholders. Recent US corporate tax reforms could encourage this trend.

‘The second quarter is seasonally important for European dividend payments and we will see a much broader range of industries and countries contributing than in Q1. Europe’s economic recovery is likely to yield healthy growth from across the region.’

He added: ‘We’re confident investors will get to celebrate a new record for global dividends in 2018.’



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