The Henderson Global Dividend index (HGDI), released this morning, found that global dividends declined $29.1 billion to $404.9 billion in the second quarter of the year.
The fall is the third consecutive quarterly drop, with strength in the US dollar accounting for most of the fall.
The much weaker Australian dollar masked “creditable” 8.9 per cent growth, according to the report.
“Among the few companies to pay in Q2, Commonwealth Bank was by far the largest, making up a little under half of the total. Headline dividends fell 15 per cent to $7.7 billion,” said the report.
However, US companies saw their dividends grow rapidly with almost every sector increasing payouts, according to the report.
“Financials showed rapid growth, with Bank of America and Citigroup quintupling their distribution,” said Henderson.
“Overall headline growth was 10 per cent, taking the total to $98.6 billion, and the US HGDI to a record 186.
“This strong performance marked the sixth consecutive quarter of double-digit increases. Underlying growth was a similarly strong 9.3 per cent.”
Henderson head of global equity income Alex Crooke said that although the headline decline seems disappointing, it conceals “very positive” underlying increases in dividends.
“The strength of the US dollar had a significant impact again this quarter but our research shows that the effect of currency movements even out over time and investors adopting a longer-term approach should largely disregard them,” Mr Crooke said.
“At the sector level, it is encouraging to see increases from financial companies as they start to slowly move towards higher payout levels. But this is less about a renewed boom to financial payouts and more about a gradual return to normality.”
