“The rapid pace of dividend payments in the markets was largely due to the high proportion of mining and energy companies within emerging markets,” said Janus Henderson Global Dividend.
Around the world, miner payouts jumped 29.7% overall, while oil dividends soared 31.8% in underlying termsdriven by a recovery among the groups that cut during 2020.
In Latin America, the Brazilian mining company Vale remained on the list of the ten largest companies in the world that pay dividends. In the first quarter of 2022, the dividends of the Brazilian mining company fell to US$3.6 billion, compared to US$4.0 billion in the same period of 2021, due to lower mineral prices.
“But the relative global strength of the mining and energy sectors meant that Vale remained one of the world’s largest dividend contributors,” Janus Henderson Global Dividend said in a news release.
In the rest of Latin America, Mexican dividends registered an overall growth of 41.5% in the first part of the year and an underlying growth of 38.8%, driven by the results of Grupo México. For its part, Brazilian companies posted underlying dividend growth of 7.4%.
Currently, “there are no Argentine companies in the index because companies operating in the country face regulatory restrictions on corporate financing strategies, including the payment of dividends,” the creators of the index said.
The only large countries to see a decline in dividends were the UK (-21.5%) and Japan (-15.2%).
While emerging markets were the main source of overall growth, the trend has been replicated around the world so far this year. “All regions posted double-digit growth due to a stronger economic backdrop and payout recovery after cuts in 2020 and early 2021. 94% of companies increased dividends or kept them flat,” explained the release.
In the US it was while total dividends grew 10.4% on an underlying basis, 99% of US companies in the sector increased their dividends or kept them stable, raising the figure of 90% reached during 2021.
“The global economy is facing a number of challenges: the war in Ukraine, rising geopolitical tensions, high energy and commodity prices, rapid inflation and a rising interest rate environment. The pressure The resulting downturn in economic growth will weigh on corporate earnings across a number of sectors,” said Jane Shoemake, client portfolio manager in the global equities team at Janus Henderson.
“These challenges also bring greater uncertainty that is likely to affect companies’ decision-making. The impact on dividends is likely to manifest beyond 2022, but it is important to remember that dividends are much less volatile than earnings. The latter tend to move dramatically through the business cycle, but dividends tend to be much more stable,” developed Jane Shoemake.
He added: “The fact that dividends have already surpassed pre-pandemic highs is part of a narrative that highlights how dividends have proven to be a reliable source of long-term earnings growth. In addition, this growth means that dividends provide a certain shelter against inflation that cash savings cannot provide.”
Source: Ambito
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