Janus Henderson Global Dividend Index: US Dividend Growth in Q1 Reaches Post-Pandemic Low

• US dividends increased 4.8% on an underlying basis during the first quarter, the slowest rate of growth since the post-pandemic recovery began
• Despite higher interest rates, the US real estate sector was the largest contributor to dividend growth during the quarter
• 97% of US companies raised their dividend payments or held them steady
• Globally, dividends jumped 12.0% on a headline basis to a Q1 record of $326.7bn – boosted by the largest contribution from special dividends in nine years
• Global underlying growth was 3.0%
• Banks, oil producers and vehicle manufacturers were significant drivers of Q1 global growth

US dividend payments increased 4.8% on an underlying basis during the first quarter of 2023, according to the latest Janus Henderson Global Dividend Index. On a headline basis, which includes special dividends, exchange rate effects and other technical factors, US dividends climbed 8.3% to a record $153.4bn during the quarter. Over a third of the $9.8bn distributed in special dividends in the US came from the booming oil sector, but the largest was distributed by Ford Motor, which used strong free cash flow to fund the one-off payment.

Globally, dividends are off to a strong start to 2023 on the back of booming special dividends. The headline total rose 12.0% to a first-quarter record of $326.7bn. Underlying growth was significantly slower at 3.0%.

One-off special dividends at highest level since 2014

One-off special dividends of $28.8bn globally were the second highest on record (after Q1 2014). Ford and Volkswagen accounted for almost a third of the world’s Q1 special dividends. Headline payouts from the vehicles sector were ten times larger year-on-year as a consequence. One-off special dividends also made a significant impact on the transport, oil and software sectors.

Growth from banks and oil companies offset by falling mining dividends

The sharp decline in mining sector payouts globally, driven down one fifth by lower commodity prices, was almost exactly offset in Q1 by the strong positive contribution to growth from banks and oil companies. Most sectors delivered single-digit growth and there were relatively few weak spots. Globally, 95% of companies either raised dividends or held them steady in Q1.

Janus Henderson now expects total dividends for 2023 of $1.64 trillion¹ globally, equivalent to a headline increase of 5.2% for the year and underlying growth of 5.0%².

Ben Lofthouse, head of global equity income at Janus Henderson said: “Q1’s strong dividend growth is all the more impressive considering that 2022 was a difficult year for the global economy with high inflation, rising interest rates, conflict and continuing Covid lock downs. This growth illustrates the fact that dividends are generally less volatile than earnings. We do expect dividend growth to slow as a result of these factors but should nevertheless continue in line with the long-term trend this year.”

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¹ Up from $1.60 trillion in January

² Up from 3.4% in January

Notes to editors

Our headline growth rate describes the change in the total dollar amount paid by companies compared to the corresponding quarter each year. Our underlying figure adjusts for the distortion that can be caused by one-off special dividends, changing exchange rates, the effect of companies entering and leaving the global top 1,200 that comprise our index and the impact of changes in payment dates. The latter two tend to be negligible over the course of a whole year at the global level, though they can have a greater impact in any one quarter, geography or sector.

About Janus Henderson

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 31 March 2023, Janus Henderson had approximately US$311 billion in assets under management, more than 2,000 employees, and offices in 24 cities worldwide. Headquartered in London, the company is listed on the NYSE and the ASX.

Source: Janus Henderson Global Dividend Index & Factset, April 2023

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