US Dividends Surge to Record High in First Quarter of 2022

• Globally, dividends surged 11% to $302.5bn, a first quarter record; underlying growth was even stronger at 16.1%
• Every sector posted dividend increases, with particular strength in oil and mining sectors

Dividend payments in the US rose 10.4% on an underlying basis to a new record of $141.6bn during the first quarter of the year, according to the latest Janus Henderson Global Dividend Index. Nearly every US company in the Index (99%) increased their payments or held them steady, as dividends continued to be a reliable source of income growth for shareholders.

Globally, first quarter dividends jumped by 11% on a headline basis to a total of $302.5bn, also a record for the seasonally quieter first three months of the year. Underlying growth was even stronger at 16.1%. Janus Henderson’s analysis shows that dividends have more than doubled since 2009, when the Index launched.

The global growth is in part due to the ongoing normalization of dividend payments following the disruption caused by the pandemic. There were significant dividend cuts in Q1 2021, so it provides a relatively low base for comparison purposes. However, the Q1 2022 growth also reflects the robust post-pandemic economic rebound that took place in much of the world in 2021 and into early this year. Globally, 81% of companies that issued payouts in the first quarter increased their dividends year-over-year and another 13% held them steady.

Upgraded forecast

Janus Henderson is maintaining its expectations for the remaining quarters of the year given the uncertain global economic outlook and rising geopolitical risks. Nevertheless, the inclusion of the robust Q1 numbers increases the forecast slightly for the year. For 2022, Janus Henderson now expects global dividends to reach $1.54 trillion, a headline increase of 4.6%, equivalent to a 7.1% increase on an underlying basis.

Miners will continue to be a significant dividend contributor in 2022

Globally, every sector posted year-over-year increases. Among the major sectors, oil and mining dividends saw the fastest growth in the first quarter. Mining payouts jumped 29.7% on a headline basis, which in this case is currently a better measure than our underlying figure (+38.0%), given the recent importance of one-off special dividends for this highly cyclical sector. BHP is set to be the world’s largest dividend payer in 2022 for the second year running.

Over the last five years, the world’s five most important dividend-paying sectors have been banks, oil producers, pharmaceuticals, telecoms, and insurance companies. Miners were seventh over the whole five years, but last year rose to third. It is clear miners will continue to be a significant contributor in 2022, potentially paying more than $100bn in dividends for the first time. Both oil and metal prices have been propelled higher following the Russian invasion of Ukraine, helping to sustain dividend growth in these sectors for the time being.

Matt Peron, Director of Research at Janus Henderson said:

“As the US corporate earnings picture improved, companies rewarded shareholders with higher dividend payments to start 2022. With rising inflation and interest rates expected to put pressure on economic growth globally, greater uncertainty is clouding the outlook for corporate profits in the second half of the year. However, it’s important to keep in mind that dividend payments are much less volatile than earnings.”

Notes to editors

Our headline growth rate simply 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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