For investors considering adding more dividend strategies to their portfolios, now may be the time.
Recently released data from Janus Henderson reports that U.S. dividend payments in 1Q24 achieved an all-time high. According to Janus Henderson, 97% of companies in the U.S. either bolstered dividend payouts or kept payments steady year over year. This contributed to a record high of $164.3 billion.
The report highlighted a few particular companies as primary players behind the results. Earlier this year, Disney resumed distributions in 1Q24 for the first time since the COVID-19 pandemic. Overall U.S. results were also boosted by both Meta and T-Mobile issuing 1Q dividends for the first time.
Across the globe, dividends reached a record $339.2 billion for the first quarter. Janus Henderson added that 93% of global companies that made dividend payments either increased payouts or maintained the same rate.
“Dividend growth in the US remains remarkably resilient as companies seek to find a balance between capital expenditures, financing needs, and shareholder returns via dividends and buybacks in this higher interest rate environment,” noted Amber Milam, client portfolio manager at Janus Henderson. “Income investors enjoyed a strong start to 2024 and current balance sheet strength suggests this momentum will continue throughout the year.”
ETFs Positioned to Benefit
Strong U.S. dividend results for 1Q24 can prove highly beneficial for ETFs with a dividend-focused strategy. For example, the Vanguard Dividend Appreciation ETF (VIG) invests in large-cap U.S. equities with a precedent for increasing dividend payouts over time.
With U.S. companies delivering dividend results, investors are piling in to capitalize on dividend strategies. In the last month alone, VIG saw net flows of over $99 million. The fund currently has more than $79 billion in assets under management.
Another fund well-positioned to benefit from 1Q24 results is the Schwab U.S. Dividend Equity ETF (SCHD). The fund generally invests in stocks within the Dow Jones U.S. Dividend 100 Index. This index seeks U.S. companies with high dividend yields and an established record of consistent dividend payouts.
Across the last month alone, SCHD has seen over $277 million in net flows. This contributes to a total AUM of over $55 billion for the fund.
Looking down the line, Janus Henderson is maintaining its previous forecast of total payouts in 2024 reaching $1.72 trillion. Underlying growth is projected to rise about 5% for the year. With momentum continuing to mount for payouts this year, dividend-focused strategies can be positioned to benefit down the line.
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