Daily Management Review

Study Predicts $1.4 Trillion In Dividend Payouts For 2021 Which Is Close To Pre-Pandemic Levels


There would likely be a stronger recovery of the global economy than expected as a new report from British asset manager Janus Henderson suggested that the total dividends that are to be paid to investors in 20201 could hit $1.39 trillion.
The report found that this forecast for dividends for 2021 was just 3 per cent lower than the pre-pandemic levels.
There was a 26 per cent year on year jump in dividend payments in the second quarter which was just 6.8 per cent lower than the dividends paid out in the same quarter in 2019. Within the next 12 months. dividend payouts will return to pre-pandemic highs, predicted Janus Henderson.
About 84 per cent of companies around the world either increased or at least maintained the same level of dividends for the second quarter compared to the same period in 2020, the research, published on Monday, said.
Companies restarting frozen dividend payouts and them issuing higher special dividends on because of strong earnings were the main factors for this growth.
The underlying dividend growth was 11.2 per cent for the second quarter not accounting for the effects of special dividends and exchange rates.
The biggest dividend payer of the world was Samsung which surpassed Nestle while the top list also included Rio Tinto, Sberbank and Sanofi.
Including its regular dividend, the total dividend distributed to its investors by Samsung was $12.2 billion, for the second quarter. According to the estimates of Janus Henderson, the South Korean tech giant is also likely to make the list of the top five dividend payers of the world for the entire year of 2021.
“The rebound has been so much stronger than we anticipated, and I think it is very encouraging that we are seeing these companies feeling strong enough to return cash back to shareholders,” Jane Shoemake, client portfolio manager for global equity income at Janus Henderson, told the media on Monday.
There was a 60.9 per cent year on year rise in dividend payouts in the United Kingdom while it was 66.4 per cent in Europe, the report said. Most of the incidents of dividends cuts were in the emerging markets, the report pointed out, which reflected lower reported profits for 2020. The report noted that the cuts in dividends in developed markets were “pre-emptive and precautionary.”
There were record dividends paid out in North America for the second quarter while there was a 45 per cent annualised growth in payouts in Asia-Pacific outside of Japan. Japanese dividend payments also remained robust in 2020, but still managed underlying growth of 11.9% year-on-year.
The Janus Henderson research showed that the booming commodity prices helped mining companies to report the fastest growth while there was also a strong bounce back for industrials and consumer discretionary companies. Their characteristically consistent single-digit growth rates were maintained by the so-called defensive sectors, such as telecoms, food and household products.
“In terms of the highest yielding sectors, the financial services and commodity sectors dividend outlooks are the most improved since last year,” said Ben Lofthouse, head of global equity income at Janus Henderson.
“The travel and leisure sectors remain hardest hit in terms of the Covid impact, and while many have adjusted operations to be able to survive, the sector is unlikely to be paying dividends until balance sheets recover, so we continue to avoid these for the time being,” Lofthouse added.