Global dividends jump to record high in the second quarter amid trade war concerns

Global dividends jumped 12.9 percent year-on-year in the second quarter to $497.4 billion, hitting a new record, according to a report on the Janus Henderson Global Dividend Index. Payments rose in almost every region of the world in headline terms and records were broken in 12 countries including France, Japan, and the U.S. This comes amid warnings from analysts that the looming trade war and punitive tariffs from the U.S. and China could pose a risk for equities across the globe.

The index, which analyses the dividends paid by the 1,200 largest firms by market capitalization, ended the quarter at a new record 182.0, meaning that global dividends have risen by more than four-fifths since 2009. In the U.S., meanwhile, dividends rose 4.5 percent to a record $117.1 billion in the second quarter. “Underlying growth was 7.8 percent after lower special dividends and index changes were taken into account, the fastest expansion in two years. Even though their expansion was a touch slower than average in the second quarter, U.S. dividends have grown more steadily than anywhere else, declining in only four quarters over the last ten years,” the report stated.

Only one company in 50 in the U.S. cut its payout, Janus Henderson noted, with the largest firm to do so being GE as it commenced a restructuring program and a bid to reduce its debts. The strong dividend growth around the world prompted Janus Henderson to increase its forecast for 2018 underlying dividend increases from 6.0 percent to 7.4 percent. The resurgent dollar, up 4.45 percent year to date against a basket of major currencies however, is offsetting the improvement, the report added.