Investing in dividends remains a favored strategy among investors aiming to boost the returns on their portfolios. For many, the third quarter of 2024 brought good news, as companies worldwide distributed $431.1 billion in dividends, according to the latest Global Dividend Index report by Janus Henderson.
This figure represents a 3.1% year-over-year increase compared to the same period in 2023, setting a new record for third-quarter payouts.
Slower Growth Despite Record Numbers
Despite the overall increase, the report highlighted a slowdown in dividend growth. “The growth rate was relatively moderate compared to previous quarters, as underlying increases had reached 6.6% in the first half of 2024,” the asset manager noted in its press release.
Janus Henderson attributed this deceleration to substantial dividend cuts by five key companies, including Evergreen Marine in Taiwan and Glencore in the United Kingdom. “Large-scale reductions by a small number of firms overshadowed the otherwise strong market performance,” the report explained.
Stability Among Most Companies
However, the majority of companies either increased or maintained their dividends during the quarter. According to the report, 88% of businesses sustained or boosted their payouts, with a median—or typical—growth rate of 6%. This stability reflects the resilience of many firms, despite challenges in specific sectors.
Revised Outlook for 2024
Due to the deceleration in growth, Janus Henderson has slightly adjusted its total dividend forecast for 2024. The revised projection anticipates global payouts to reach $1.73 trillion by the year’s end, reflecting a 4.2% year-over-year increase from the $1.66 trillion distributed in 2023.
Regional Insights: Europe and Seasonal Factors
The report also examined regional trends, particularly in Europe. “Underlying growth in the third quarter was slightly slower than in the first half of the year,” noted Juan Fierro, Janus Henderson’s Director for Iberia. He emphasized that the summer seasonal lull had a noticeable effect, as many European countries distribute fewer dividends during this period. Nevertheless, Spain, alongside France and the Netherlands, accounted for half of the total dividends paid in the region.
