Payouts to shareholders from UK-listed companies rose over 6% last year to a record £81bn, according to the latest Janus Henderson Global Dividend Index.

The increase was boosted by big special payments from miners BHP (BHP) and Rio Tinto (RIO), as well as Royal Bank of Scotland (RBS).

But when stripping out the special payouts, as well as currency fluctuations, underlying UK dividend growth was just 2.8%, below the 3.5% global average.

Big FTSE 100 dividend payers like oil and gas producers BP (BP.) and Royal Dutch Shell (RDSB), pharma giants GlaxoSmithKline (GSK) and AstraZeneca (AZN) and bank HSBC (HSBA) have all barely grown dividends over the past couple of years.

RECORD DECADE UNLIKELY TO BE REPEATED THIS TIME

The dividend report, which looks at dividend payouts from the biggest 1,200 listed firms across the globe, showed that in the last ten years the world’s listed companies have paid their shareholders a whopping $11.4tn in total.

It’s a figure the firm says is unlikely to be repeated this decade, particularly as the ‘extremely strong’ dividend growth of the last decade came off the low base of 2009 following the financial crisis.

Around $1.43tn (£1.1tn) was paid out in dividends in 2019.

From a sector perspective, the fastest growth came from the oil sector, with dividends rising by a tenth, while telecoms saw payouts fall.

The two biggest regions for dividend growth have been North America and Japan.

In 2019, US payouts rose 6.8% on an underlying basis, reaching a record $490.8bn, though the second half of the year saw slower growth than the first.

Double-digit dividend increases from almost every bank were the most significant growth driver, while US banking dividends have doubled in the last five years alone.

DIVIDENDS KEY PART OF 'ABENOMICS'

Japan enjoyed its fifth consecutive year of world-beating dividend growth, growing its level of payouts at a higher rate than any other country.

Its benchmark Nikkei 225 index may have gone nowhere over the last couple of years, but payouts to shareholders have soared since Prime Minister Shinzo Abe came to power in December 2012.

A pillar in his ‘Abenomics’ strategy to get Japan’s economy moving again, the Japanese prime minister made improving shareholder returns a priority.

One means of doing so was to encourage Japanese companies, well known for hoarding cash in case they need to fix holes in their balance sheets, to raise dividends instead.

Ben Lofthouse, co-manager of global equity income at Janus Henderson, said the slowing pace of earnings growth in 2019 has inevitably impacted dividends, particularly after a strong two years, but insisted ‘there is still growth’.

He said, ‘The underlying 5.4% increase witnessed in 2019 was in line with the longer-term trend and highlights the resilience of dividends when economies face headwinds.

‘Moreover, taking a global approach to income enables investors to take advantage of the benefits of both geographical and sectoral diversification.

‘For the year ahead, the market expects the global economy and company profits to continue to expand, meaning dividends can grow further. 2020 is on track to deliver the fifth consecutive year of record dividends.’

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Issue Date: 17 Feb 2020