Dividend payments worldwide fell by a staggering $ 108 billion to $ 382 billion in the second quarter of this year, according to the latest news investment company Janus Henderson.
–
This is a year-on-year decline of 22 percent and is also the worst decline since the creation of the Janus Henderson dividend index in 2009 and the worst second quarter since 2012. “The global dividend will be the worst in 2020 since the financial crisis,” the company writes in a report. . “We now expect total global dividends to fall by 17 percent at best, for the full year. Then $ 1.18 billion should pay off. In the worst case scenario we estimate, it will pay off 1.10 billion, which means a drop of 23 percent, “the report said.
–
Canada and China
The only region in the world where dividend payments did not deteriorate but did not improve was North America. Canada excelled and even managed to see an improvement of 4.1 percent. Of the large US northern neighbor companies surveyed, only three have reduced or completely suspended dividend payments. Canada thus ranks alongside China and is currently the only two large countries to see dividend growth during the pandemic.
–
Janus Henderson Global Dividend Index
Each year, Janus Henderson analyzes the dividends (money paid to shareholders from a share in the company’s profits) paid to the 1,200 largest companies in the world by market capital.
The company is headquartered in London and was established in 2017 by the merger of Janus Capital Group and Henderson Group.
——
Worldwide, dividend payments were reduced to 27 percent of companies surveyed. But well below this average is Europe, which is also the worst hit in terms of dividends.
–
European disaster
For the old continent, the second quarter is the most important seasonally, as two thirds of all dividends will be paid during this period, according to the report. Last quarter, payouts fell 45 percent – more than $ 66 billion – to $ 83 billion. This is the least money paid out at least since 2009.
–
In addition, 54 percent of European companies cut payouts in the second quarter, and two-thirds canceled their dividends altogether. Banks are to blame for the most, almost half of them. European banks have often been banned from paying dividends by the state.
–
However, large differences between countries were also seen in Europe. The bloc of countries, which includes France, Spain, Sweden and Italy, have been hit harder than Germany. For example, Spain saw a reduction of 70 percent, while Germany only 19 percent. The absolute premium, however, was Switzerland, which managed to withstand the pandemic almost without dividend damage.
–
The United Kingdom was excluded from these European statistics, but it did not do very well either. The total amount paid fell by 54 percent.
–
Technology continues to rise
There were also big differences in individual business sectors. In addition to the large decline in banking, the deterioration of the situation of mining and oil companies can be observed, which was most affected by the decline in demand – and therefore prices – for their goods.
–
Technology companies also confirm their dominance in the payout of their investors. Overall, they improved by 1.8 percent. Another sector that held up relatively well under the current conditions was pharmaceutical companies. They recorded a slight increase of 0.1 percent.
–
Thanks to the excellent situation for technology giants, Microsoft and Apple for the first time fought their way into the ten companies that are the highest dividend payers. “Trends in dividends reflect current trends in the company and the stock market,” he comments Reuters Ben Lofthouse, Head of Global Stock Revenue at Janus Henderson. “We are likely to see increases in certain parts of the technology sector,” he added. This letter has long been dominated by Nestlé.
—
