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Investors took $1 trillion in 2013 payout bonanza

February 24, 2014


GLOBAL payouts to investors topped a record $1 trillion (602bn) last year, after resilient corporate balance sheets helped grow dividend payments by $310bn since 2009, fresh data out today shows.

Total dividend payments rose to $1.03 trillion in 2013, up 43 per cent from $717.2bn in 2009, when equity markets fell to their lowest level of the crisis era, according to data from Henderson Global Investors.

The average annual increase of 9.4 per cent a year in global dividends underlines the contrast between problems faced by sovereign governments during the financial crisis and the relative strength of the global corporate sector.

"The sharp recovery of dividends over the period shows that some corporates got their balance sheets in order very, very quickly," Henderson's head of global equity income Alex Crooke said.

US and UK corporates have grown their dividends much more successfully than their eurozone counterparts, while Asia Pacific companies demonstrate the strongest growth.

Dividends in the US and UK rose 49 per cent and 39 per cent respectively between 2009 and 2013, versus a eurozone average of eight per cent. Asia Pacific grew dividends by 79 per cent.

Technology companies were also one of the best dividend paying stocks to pick, having doubled their payouts since 2009 despite only making up a small part of the market.

Dividends are becoming increasingly important to investors looking for solid, predictable yields in an era of fluctuating asset prices. The figures compiled by Henderson are part of a new quarterly study by the asset manager to track dividend payments. "The search for income is more than just a response to rock bottom interest rates in recent years," Henderson boss Andrew Formica said: "It marks a generational shift as ageing populations must increasingly rely less on state pensions and more on their own savings to provide for retirement." Royal Dutch Shell remained the best dividend paying company, taking the top spot for three of the five years.

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Source: City A.M. (UK)

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