The Janus Henderson Global Dividend Index showed that dividends were at record levels globally in 2022, rising 8.4 per cent to US$1.56 trillion ($2.27 trillion). Adjusting for a stronger US dollar and other factors, underlying growth was even higher at 13.9 per cent.
Australian dividends for the year were $97.7 billion, which was a record in Australian dollar terms.
The banking and mining sectors accounted for more than three-quarters of Australian dividends paid in 2022, highlighting Australia’s continued reliance on these areas.
BHP led the way for Australian dividends, with the mining company increasing its payouts 8 per cent, even following the full demerger of its stake in Woodside Petroleum.
The lower price of commodities in 2022 has seen mining companies decrease their payouts from the record levels of 2021, including in Australia. Fortescue Metals was the first Australian miner to cut its payout, and although Rio Tinto’s full-year dividend was up, it was in decline by the second half.
Large banks have increased their payouts to 5.9 per cent over the year, which Janus Henderson said mirrored their US, UK, and European counterparts in building on the recovery from 2021.
Jane Shoemake, client portfolio manager for global equity income at Janus Henderson, said: “Despite rampant inflation, interest-rate hikes, war, and asset price declines in 2022, global dividends continued to grow highlighting their importance to investors all round the world.
“Global dividends have completely caught up after the pandemic, with payouts back to their historic trend. This is an amazing achievement given the extent of economic disruption caused by COVID-19.”
By the fourth quarter, Janus Henderson said global dividend growth had slowed to 7.8 per cent on an underlying basis. However, it is difficult to compare this figure to the prior corresponding period given that Q4 2021 was boosted by catch-up payments from cuts made during the pandemic, especially in Europe.
There were also signs that higher interest rates may have begun to impact on companies’ willingness to grow dividends — in the US, for example, growth in the fourth quarter slowed to 5.5 per cent.
Janus Henderson forecasted slower growth in 2023, with payments of US$1.6 trillion, up 2.3 per cent on a headline basis, equivalent to an underlying increase of 3.4 per cent.
