Shareholders received more than $1 trillion in global dividends for the first time in 2013, buoyed by growth in payouts from emerging market firms, a study showed. Dividend payments grew 43 percent since 2009, the research by Henderson Global Investors found, hitting $1.03 trillion last year. One in every $7 came from EM firms, dividends from which have risen 107 percent over the past five years.
Companies in Brazil, Russia, India and China were responsible for much of that growth, which came despite a slowdown in many markets since May after the US Federal Reserve flagged plans to wind down its monetary stimulus programme. "The trillion dollar dividend is a huge milestone for equity investors and illustrates that dividends are now a vital component of investors' returns," Henderson Chief Executive Andrew Formica said.
The study analysed dividends from the 1,200 largest companies by market capitalisation around the world from 2009 and used averages to estimate payments for other listed companies. The emerging market growth helped pick up the slack from continental Europe, which posted growth of just 7.8 percent over the same period, though it was still the second largest region for dividends in 2013 behind the United States.
Dividends from technology companies have grown the most over the past five years, more than doubling since 2009, the study found, but financial firms accounted for by far the largest share of dividends in 2013, providing almost a quarter. Royal Dutch Shell was the top dividend payer last year, followed by Exxon Mobil with Apple rounding out the top three.
Despite passing the $1 trillion milestone, global dividend growth still slowed from the year before, to 2.8 percent from 7.7 percent, weighed down by slowdowns in Japan and the United States, where a spate of special dividends were not repeated. Henderson forecast dividend growth to rebound in 2014, however, with improved strength in developed markets and a positive outlook for corporate earnings driving growth as investors hunt for higher returns.
"Ageing populations must increasingly rely less on state pensions and more on their own savings to provide for retirement," Formica said. "Not only that, but they will need to stay invested in equities much longer than in the past too. This demand for equity income is a trend we see continuing through 2014 and beyond."
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