Dividend Payouts Projected To Reach $1.4 Trillion This Year

Dividend payouts to shareholders are projected to reach $1.39 trillion U.S. in 2021, just 3% below their pre-pandemic peak, according to a new report from British asset manager Janus Henderson.

Dividend payments in the second quarter increased 26% from the same period last year to $471.7 billion U.S., just 6.8% below the levels seen in the second quarter of 2019 before the pandemic.

Janus Henderson projects that dividend payouts will return to their pre-pandemic highs within the next 12 months. The research, published Monday (August 23), said 84% of companies around the world either increased or maintained their dividends compared to the same quarter in 2020.

Much of the growth was attributed to companies restarting frozen payouts and issuing higher special dividends on the back of strong earnings. Underlying dividend growth in the second quarter, stripping out the effects of special dividends and exchange rates, was 11.2%.

Samsung has surpassed Nestle as the world’s biggest dividend payer, with Rio Tinto, Sberbank and Sanofi also making the top five. Samsung distributed a total of $12.2 billion to investors once its regular dividend was included, and Janus Henderson anticipates that it will likely be among the world’s top five payers throughout 2021.

Dividend payouts in the United Kingdom surged 60.9%, and in Europe climbed 66.4%, while most of the dividend cuts were in emerging markets, the report said. Janus Henderson said dividend cuts in developed markets were "pre-emptive and precautionary."

North America, meanwhile, saw record dividends in the second quarter, driven by Canada. However, payouts in the region had largely held up throughout 2020, meaning there was little rebound effect, particularly in the United States.

In Asia-Pacific, headline dividend growth was 45% annually in the second quarter, buoyed by Samsung’s one-off special dividend, with South Korea and Australia leading growth in the region. However, Singapore remains constrained by restrictions on banking payouts.