2023 could be a successful year for shareholders: According to a fund provider, global companies are paying out higher dividends than ever before, despite the economic uncertainty.
Equity investors can look forward to higher dividends than ever before this year. The British fund house Janus Henderson has raised its forecast and now expects worldwide profit distributions of 1.64 trillion US dollars. That would be a record and an increase of more than five percent compared to 2022. Although dividend growth has slowed as the global economy weakens due to inflation and rising interest rates, the situation has recently improved, the fund managers say.
The main reasons are the still ongoing recovery in the European banking sector after the corona pandemic and an exceptionally high number of one-off special dividends at the beginning of the year. These would have ensured that global dividends climbed by twelve percent in the first quarter to a record level of 326.7 billion US dollars.
Moller-Maersk at the top
After investigating the fund provider, the tagesschau.de is available, 95 percent of companies worldwide increased their dividends or kept them constant. Banks and oil producers were the main contributors to growth in the first quarter. But car manufacturers also reported strong results and high special dividends. On the other hand, there were low payouts as a result of low raw material prices, especially in mining. According to the study, dividends in the sector fell by a fifth. Otherwise there were few outliers.
The Danish shipping group AP Moller-Maersk ranked first among the top dividend payers in the first quarter. The shipping company achieved another record profit in 2022 due to strong demand and high freight prices. The company paid out a regular dividend of 2,000 crowns per share and a special dividend of 2,300 crowns per share. In total, the investors received almost 600 euros per share certificate. According to Janus Henderson, Moller-Maersk and nine other companies were responsible for 19 percent of the dividends.
| Place | Pursue | sector |
|---|---|---|
1 | AP Moller-Maersk | shipping |
2 | BHP | Mining |
3 | Novartis | Pharma |
4 | Roche | Pharma |
5 | Volkswagen | automobile |
6 | Microsoft | technology |
7 | Exxon Mobile | oil |
8th | Siemens | conglomerate |
9 | Apple | technology |
10 | Commonwealth Bank of Australia | banks |
Record sum also expected in Germany
In Germany, Volkswagen paid a $6.3 billion special dividend in the first quarter, derived from proceeds from Porsche’s IPO. Janus Henderson said it was the world’s eighth largest special dividend since data collection began in 2009. As a result, the total dividend in Germany rose by 110 percent to USD 11.4 billion (EUR 10.6 billion) in the first three months of the year. Without taking into account the special dividend and exchange rate effects, it climbed by 3.6 percent.
In total, the 750 public limited companies in Germany want to distribute around 75 billion euros to their shareholders this year in 2023 – that would also be a record sum and nine percent more than in the previous year. This is the result of calculations by the German Association for the Protection of Securities (DSW) and the isf Institute for Strategic Finance at the FOM University. Above all, shareholders of the DAX companies benefit from the dividend rain: The 40 companies in the top German stock exchange league distribute an estimated 52.5 billion euros.
In addition to VW, the strong growth is mainly based on a company that is almost doubling its dividends this year: Hapag-Lloyd. The traditional shipping company is enthroned at the top with a payment of 11.1 billion euros and alone accounts for almost 15 percent of the total distributions of the German stock exchange groups. After container shipping was characterized by overcapacity and low margins for a long time before Corona, Hapag-Lloyd was able to benefit massively from the increased freight rates in the 2022 financial year and generate a result of 17.5 billion euros.
With information from Till Bücker, ARD finance department.