Global dividends grew to a record USD1.75 trillion in 2024, according to the latest Janus Henderson Global Dividend Index, up 6.6 per cent on an underlying basis and 5.2 per cent on a headline basis, reflecting lower one-off special dividends and the stronger US dollar.
The result for the year was slightly ahead of Janus Henderson’s forecast of USD1.73 trillion, mainly owing to greater-than-expected strength in the US and Japan in the final quarter.
Globally 88 per cent of companies raised dividends or held them steady, with 17 countries out of the 49 in the index seeing record dividends, including some of the largest payers such as the US, Canada, France, Japan and China.
Dividend payouts in Q4 2024 rose 7.3 per cent
In the final quarter of 2024, dividend payouts increased by 7.3 per cent. There was broad growth in markets such as Spain (+26.3 per cent on an underlying basis) and Japan (+18 per cent) although overall growth was dampened somewhat in markets such as the UK and France, where underlying growth was 0.8 per cent and -1.5 per cent respectively.
2024 growth driven by first-time payers & the financial services sector
Large companies making their first dividend payments made a disproportionate impact in 2024. The biggest of these came from Meta and Alphabet in the US, and Alibaba in China; between them, they distributed USD15.1 billion and accounted for one fifth of 2024’s global dividend growth.
From a sector perspective, almost half the growth in 2024’s dividends came from financials, particularly banks, whose dividends rose 12.5 per cent on an underlying basis. Media sector dividends also saw robust growth, doubling on an underlying basis year-on-year helped by Meta and Alphabet’s payments. Growth was very broadly based across sectors, however: telecoms, construction, insurance, consumer durables, and leisure all saw double-digit increases. The weakest sectors were mining and transport, which between them paid out USD26 billion less year-on-year.
UK dividends were largely unchanged on an underlying basis
Cuts in the mining sector in 2024 meant underlying payouts in the UK fell slightly (-0.6 per cent), although this masked some growth in the wider market. 85 per cent of UK companies increased payouts or held them steady, and there were strong contributions from a range of sectors including banks, oil producers, and healthcare.
Microsoft was largest dividend player in the world in 2024
For the second year running, Microsoft was by far the largest dividend payer in the world, but Exxon Mobil, newly enlarged after its acquisition of Pioneer Resources, rose to second place, a position it last occupied in 2016. HSBC was the third largest dividend payer, followed by Apple and China Construction Bank.
Record payouts expected for 2025
For the year ahead, Janus Henderson expects dividends to grow by 5.0 per cent on a headline basis (+5.1 per cent underlying), bringing total payouts to a record USD1.83 trillion.
Jane Shoemake, Client Portfolio Manager on the Global Equity Income team at Janus Henderson, says: “Dividend growth was stronger last year than we expected, driven in part by the initiation of dividends from some of the Magnificent Seven stocks in the US. They are proving that they are just like successful companies before them: as they start to mature, they begin to generate surplus cash, which they can hand back to their investors, giving global dividend growth a significant boost.
“2025 looks to be an uncertain year for the world economy: whilst it is expected to continue to grow at a reasonable pace, the risk of tariffs and possible trade wars, along with the high level of government borrowing in many large economies, could lead to further market volatility. Higher interest rates can impact investment and profitability due to the higher cost of finance. That said, markets still expect company earnings to rise by more than 10 per cent in 2025, according to consensus forecasts. Even if this is somewhat optimistic, given some of the current global economic and geopolitical challenges, the good news for income investors is that dividends typically prove to be much more resilient than profits through economic cycles. Companies have discretion over how much they distribute to shareholders so there is much less variability in dividend income streams than earnings, which is why we expect dividends to continue to grow and reach a new record in the year ahead.”
Andrew Jones, Portfolio Manager on the UK Responsible Income team at Janus Henderson, adds: “We see plenty of reasons for income investors to remain optimistic going forward. Last year, 85 per cent of UK companies increased payouts or held them steady, with many offering attractive yields compared to other global markets. UK equities continue to provide a reliable income stream while remaining attractively valued in our view, presenting plenty of opportunities for capital growth alongside income.”
