Janus Henderson Global Dividend Index

US Companies Distributed US$148 Billion in Dividends in Q2

US dividend payments increased 4.6% on an underlying basis during the second quarter of 2023, according to the latest Janus Henderson Global Dividend Index. On a headline basis, which includes special dividends, exchange rate effects and other technical factors, US dividends climbed 2.6% to $148.0bn during the quarter. This marks the sixth consecutive quarter of slowing US dividend growth, however, 98% of US companies either raised their payouts or held them steady.

Notably, US healthcare companies were the biggest drivers of growth in Q2, led by UnitedHealth Group and Eli Lilly. US real estate companies came in at a close second, with logistics property specialist Prologis in front.

Globally, dividends rose to a new record in the second quarter, as payouts reached $568.1bn, up 4.9% on a headline basis. Underlying growth of 6.3% marked an acceleration compared to the first quarter and reflected Europe’s Q2 seasonal dominance – the period when most European companies make a single annual payment.

Europe ex-UK saw record dividends - 10.0% underlying growth exceeded other regions

European payouts rose by a tenth year-on-year (+9.7% headline, +10.0% underlying), the fastest of any region, taking the total to a record $184.5bn and reflecting strong profitability in the 2022 financial year. Significantly higher banking dividends were the most important driver of European growth, followed by vehicle manufacturers. Switzerland, France and Germany all saw record payouts.

Banks contributed half the world’s dividend growth in Q2

From a sector perspective bank dividends were strong all over the world with few exceptions. They accounted for half the global growth in Q2 as rising interest rates boosted margins and pandemic-related disruption to dividend payments finally worked its way out of the numbers.

Vehicle dividends also grew strongly, but mining payouts fell

Vehicle manufacturers accounted for one seventh of the year-on-year increase in Q2 global payouts. Half of this came from German companies, but the sector was strong all over the world. Miners made the biggest negative contribution, owing to lower commodity prices, while oil payouts fell owing to cuts from Latin American producers.

Globally, 88% of companies either increased dividends or held them steady in Q2.

2023 forecast unchanged owing to growing economic uncertainty

The second quarter was very positive, but with expectations for global economic growth slowing, Janus Henderson has made no change to its forecast for the full year. The global fund manager still expects payouts to rise 5.2% on a headline basis to a record $1.64 trillion, equivalent to underlying growth of 5.0%.