(BFM Bourse) – Listed companies did not fail to reward their shareholders last spring. A record amount of 606.1 billion dollars was paid to them, according to the latest report from Janus Henderson.
With the return of sunny days, dividends have also tended to flourish. Global companies were generous with their shareholders last spring, according to the management company Janus Henderson, which compiles data from 1,200 listed companies worldwide.
In the second quarter of 2024, they redistributed a “record” $606.1 billion to their shareholders, an increase of 5.8% over one year. Without taking into account exchange rate effects or extraordinary payments, the increase even reached 8.2%, with banks once again being “the main driver of the increase in remuneration”, representing a third of the underlying increase compared to the previous year.
Alphabet and Meta’s first dividends
American tech giants also contributed to this increase in the amount of global dividends of 1.1 percentage points. Including Meta, which announced at the beginning of the year the payment of its very first dividend of 50 cents per share.
Alphabet has also followed in the footsteps of Mark Zuckerberg’s group. In April, Google’s parent company also sent a message of confidence to its shareholders by announcing the payment of a coupon (of 20 cents per share). Alphabet also specified that it intended to pay a cash coupon every quarter.
“The introduction of dividends by major US media and technology companies Meta and Alphabet, as well as China’s Alibaba, among others, is a very positive signal that will boost global dividend growth by 1.1 percentage points this year,” said Jane Shoemake, client portfolio manager at Janus Henderson.
“These companies are following a path well-trodden by growth industries over the last two centuries, reaching a point of maturity where dividends are a natural way to return excess cash to shareholders,” the specialist continues.
She said paying dividends would also broaden their appeal to investors for whom dividends are a key part of their investment strategy, and could also encourage other companies to follow suit.
This new policy of returning to shareholders by these tech giants is part of a more global upward trend. More than 9 out of 10 companies have increased their dividends or maintained them, reports Janus Handerson. In addition, the asset manager points out that a third of sectors have experienced double-digit underlying growth and only three sectors have seen their dividends decrease.
A seasonal effect
In Europe, dividends benefited from a seasonal effect as companies in the Old Continent most often pay their coupons in April, May and June. With $204.6 billion paid out, the region reached a record amount, with payments jumping 7.7% year-on-year, with record amounts in France, Italy, Switzerland and Spain,”
“More than half of European dividend growth comes from banks that have benefited from rising interest rates,” says Janus Henderson.
In France, a new record was even broken for a second quarter, with 58.6 billion dollars (54.3 billion euros) paid out. In the country, “dividends increased by 6.8% in the second quarter”, with “exceptional dividends from Hermès and Airbus having allowed new peaks to be reached”, while “Axa and BNP made the greatest contribution to growth thanks to strong profitability”, underlines Charles-Henri Herrmann, director of development France and Benelux at Janus Henderson.
After a strong second quarter, and to take into account the strong contribution that new dividend entrants could make this year, Janus Henderson said it has revised upwards its forecast for 2024.
The global asset manager now expects companies around the world to distribute a record $1.74 trillion, up 6.4% from 2023 on an underlying basis (up from 5% at the time of its first-quarter report) and equivalent to an overall increase of 4.7% (up from 3.9%).
Sabrina Sadgui – ©2024 BFM Bourse
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