A Reuters analysis of 3,394 global companies with market capitalization north of $1 billion saw that shareholder payouts are estimated to top $1.37 trillion in 2021. European payouts are estimated at $252.4 billion, a 25% rise. US Dividends, meanwhile, were up 8.6%, to $562.3 billion.
This growth in dividends is explosive compared to last year, which saw a huge payout slump as the COVID-19 pandemic spurred companies to be more defensive with their payments.
“The robust growth in dividend payouts by global companies reflects the sharp snapback in earnings post the pandemic-driven weakness. Dividend payouts are normalizing alongside economic stability and corporate confidence,” said Geoffry Dailey, senior portfolio manager at BNP Paribas Asset Management. He continued, “Capital markets are accessible and corporate balance sheets are healthy further bolstering the ability of firms to increase dividends.”
The increase in commodity prices was particularly lucrative for mining firms, which led to dividend payouts. The financial sector also saw massive dividend growth as central banks relaxed restrictions on dividends and buybacks that were imposed during the pandemic. Global companies overall were up 22% over the same period last year.
“Globally 90% of companies either raised their dividends or held them steady – a very strong reading,” Janus Henderson noted in a report.
With global dividend growth significantly outpacing US dividend growth, investors might be interested in kicking the tires on the SmartETFs Asia Pacific Dividend Builder ETF (ADIV). Because Asian companies historically refrain from dividends, there is tremendous room to grow. Especially as dividends are starting to become more in favor around the world. ADIV focuses on high-quality Asian companies that are likely to see continued dividend growth in the long term.
ADIV has an expense ratio of 0.78% and a dividend yield of 2.86%.
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