Strong Q1 sees Janus Henderson upgrade 2022 forecast to $1.54tn but dividend expectations remain unchanged given continued economic, geopolitical uncertainty

In the 34th edition of the Janus Henderson Global Dividend Index, the company reported that first-quarter dividends jumped up by 11 per cent on a headline basis to a total of $302.5 billion − a record for what is normally a quieter time of year, according to the latest Janus Henderson Global Dividend Index.

Underlying growth was even stronger at 16.1 per cent with Janus Henderson’s analysis showing payouts more than doubling since the start of the index in 2009.

The growth is in part due to the ongoing normalisation of payouts following the disruption caused by the pandemic. While Q1 2021 provides a relatively low base for comparison, given the extent of dividend cuts registered, Q1 2022 growth rates also reflect a robust post-COVID economic rebound which took place across much of the world during 2021 and the start of 2022.

Globally, 81 per cent of companies that issued payouts in the first quarter increased their dividends year-on-year, while another 13 per cent held them steady.

Upgraded forecast

Janus Henderson foresees no improvement to its dividend expectations for the remainder of the year given the uncertain global economic outlook and rising geopolitical risks.

Robust Q1 numbers nevertheless increase the forecast slightly for the year with Janus Henderson now expecting global dividends to reach $1.54 trillion, a headline increase of 4.6 per cent − equivalent to a 7.1 per cent increase on an underlying basis.

US, Canada, Denmark set all-time quarterly records but Asia struggles

Every region reported double-digit growth, with the US, Canada and Denmark setting all-time quarterly records.

Every region reported double-digit growth

US payouts rose 10.4 per cent on an underlying basis to a new record of $141.6 billion, while Canadian dividends increased by 14 per cent on an underlying basis to $13.4 billion.

Ninety-nine per cent of US companies in the index raised or held dividends steady, up from 90 per cent during 2021. Similarly, 97 per cent of Canadian companies in the index, particularly oil producers and banks, registered increases.

Denmark owes its record quarter to Danish shipping group Moller-Maersk, which issued the biggest single dividend increase. Payouts showed notable weakness in parts of Asia, such as Hong Kong, where lockdowns continue to impact economic growth.

Miners will continue to be a significant dividend contributor in 2022

Every sector posted year-on-year increases. Among the major sectors, oil and mining dividends saw the fastest growth in the first quarter, with mining payouts increasing by 29.7 per cent on a headline basis, which in this case is currently a better measure than the underlying figure (+38.0 per cent) given the recent importance of one-off special dividends for this highly cyclical sector.

BHP is set to be the world’s largest dividend payer for the second year running.

The five most important dividend-paying sectors over the past five years have been banks, oil producers, pharmaceuticals, telecoms and insurance companies with miners trailing behind in seventh.

The sector increased to third last year and it is clear that mining will continue to be a significant contributor in 2022, with dividends potentially peaking above $100 billion for the first time.

Oil and metal prices have shot up following the Russian invasion of Ukraine, sustaining dividend growth in these sectors for the time being.

Janus Henderson Investors are locally represented by Jesmond Mizzi Financial Advisors, providing local investors access to its highly diversified range of products including funds within the Janus Henderson Horizon Fund, as well as sub-funds which vary from country specific to sector portfolios.

Janus Henderson Group is a leading global active asset manager dedicated to helping investors achieve long-term financial goals through a broad range of investment solutions, including equities, fixed income, multi-asset and alternative asset class strategies. At March 31, 2022, Janus Henderson had approximately $361 billion in assets under management. Headquartered in London, the company is listed on the NYSE and the ASX.

Jesmond Mizzi Financial Advisors are licensed to conduct Investment Services business by the Malta Financial Services Authority and is a member firm of the Malta Stock Exchange.