The firm’s Global Dividend Index (GDI) revealed a 7.7% increase in dividends on a headline basis throughout the year, taking the total paid to $1.252trn (£890bn, €1trn) – the fastest growth rate since 2014.
Janus Henderson’s index rose to a record 171.2, meaning dividends have risen by almost three quarters since 2009.
Underlying growth, which adjusts for movements in exchange rates, one-off special dividends and other factors, was 6.8% with dividends increasing for every region in the world.
Records all round
In 2017, the US saw a 5.9% increase on a headline basis and 6.3% at the underlying level. US companies paid out a record $431.8bn throughout the year.
Asia Pacific ex Japan also experienced a record year with the total paid jumping 18.8% to $139.9bn, helped by exceptionally large dividends in Hong Kong, the largest from China Mobile.
Similarly, Japanese dividends grew 11.8% on an underlying basis after accounting for the weaker yen. Headline growth of 8.1% pushed Japanese dividends to a record $70bn.
Rising energy prices and a pick-up in global economic growth buoyed emerging markets dividends to a 16.5% increase, hitting $102.4bn. This was equivalent to an underlying increase of 8.6% once stronger emerging market exchange rates, higher special dividends, and new index entrants were accounted for.
Despite this, EMs remain a long way below their 2013 peak, Janus Henderson said.
Europe lagging
Europe lagged other regions with underlying growth of just 2.7%. In total, European companies distributed $227.4bn to shareholders, after a 1.9% increase in headline terms. Janus Henderson said the region’s disappointing performance was driven by cuts from large companies in France and Spain in Q4, a weak euro during Q2 and lower special dividends.
In the UK, market underlying growth was 10% with headline growth a relatively modest 3%. Janus Henderson said this came as UK-listed multinational mining companies rapidly restored the dividends they had cut or cancelled in the lean years for commodity prices. The total paid was $95.7bn.
Ben Lofthouse, director of global equity income at Janus Henderson, said: “While equity markets have been volatile recently, dividend payments are reflective of corporate health and economic conditions, and we expect them to be much more stable. 2017 was a great year for income investors with dividend growth broadly spread across countries and industries.
“All three of the largest economies in the world, the US, the EU, and China, are now expanding at the same time. As a result, companies are seeing rising profits, and healthy cashflows, and that’s enabling them to fund generous dividends. The record payout last year was almost three-quarters higher than in 2009, and there is more to come. The next few months are set fair, and we expect global dividends to break new records in 2018.”
For 2018, Janus Henderson is expecting a similar level of headline growth with a 7.7% increase (6.1% for underlying growth) which will bring total global dividends to $1.348trn.
