US dividends surge to all-time high in Q2 2022
August 24 2022 - 8:30AM
Business Wire
Strong growth from financial sector lifts
equity income
- US dividends rose 8.3% in the second quarter
to $144.4bn - an all-time quarterly high.
- Two-fifths of the increase in US dividend
payments came from the booming financial sector.
- Globally, quarterly dividends totalled
$544.8bn in Q2, up 19.1%.
- 94% of companies in the Janus Henderson Global
Dividend Index increased or maintained their dividends.
US dividends increased 8.3% on an underlying basis in the second
quarter to $144.4bn, an all-time quarterly high, according to the
latest Janus Henderson Global Dividend Index. Two-fifths of the
increase can be traced to the financial sector. Notably, Morgan
Stanley and Wells Fargo made the largest contributions to growth in
US dividends, collectively contributing an extra $1.1 billion.
Globally, dividends surged 19.1% on an underlying basis to an
all-time quarterly high of $544.8bn in Q2 2022, as 94% of companies
raised or maintained dividend payments during the quarter. Despite
the significant economic disruption caused by the pandemic, global
dividends have surpassed pre-pandemic levels.
Upgraded forecast
Janus Henderson is making a modest upgrade to its annual
forecast, now expecting 2022 dividend payments to reach $1.56
trillion – up from $1.54 trillion last quarter. This translates
into headline growth of 5.8% year-over-year, equivalent to an 8.5%
increase on an underlying basis.
Oil, financials and car manufacturers were key
drivers
Key sector trends played out internationally. Surging cash flows
from high oil prices meant oil producers contributed two-fifths to
second quarter growth; those in Brazil and Colombia in particular,
contributed significantly.
Banks and other financials accounted for another two-fifths of
overall growth, while consumer discretionary sectors, especially
car manufacturers, also delivered strong dividend growth. Lower
special dividends and a steep cut from AT&T held back
technology and telecoms, respectively.
Matt Peron, Director of Research at Janus Henderson said:
“Dividends continue to capture investor attention as uncertainty
surrounding the economy’s plight has increased demand for companies
with strong free cash flow. As we move toward 2023, any slowdown in
economic growth will likely have a larger impact on dividend
payments outside the US. Within the US, dividend growth has shown
remarkable resilience across market cycles, as companies have
demonstrated they are more likely to cut back on share buybacks
than trim dividend payments.”
To receive a copy of the latest Janus Henderson Global Dividend
Index, click here.
Notes to editors Our headline growth rate describes the
change in the total dollar amount paid by companies compared to the
corresponding quarter each year. Our underlying figure adjusts for
the distortion that can be caused by one-off special dividends,
changing exchange rates, the effect of companies entering and
leaving the global top 1,200 that comprise our index and the impact
of changes in payment dates. The latter two tend to be negligible
over the course of a whole year at the global level, though they
can have a greater impact in any one quarter, geography or
sector.
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