(News Bulletin 247) – Listed companies were a little less generous with their shareholders this summer than last year. A little more than $420 billion was paid to them, or 0.9% less, according to a report by Janus Henderson.

This summer, global companies paid slightly fewer dividends to their shareholders. In the third quarter of 2023, they redistributed the equivalent of $421.9 billion to their shareholders, according to the management company Janus Henderson which compiles data from 1,200 listed companies around the world.

This is 0.9% less than in the third quarter of 2022. The figures presented by Janus Henderson were weighed down by the Petrobras and BHP groups, which “unexpectedly” decided to significantly lower their coupons over the quarter.

The Brazilian oil company and the Australian mining giant are none other than the world’s biggest dividend payers in 2022. They alone caused dividend growth to plunge by two percentage points, “masking strong performance visible in most regions of the world,” says Janus Henderson.

Ultimately, underlying growth, which takes into account one-off special dividends, exchange rates and other technical factors, came in at 0.3%. And excluding the cuts decided by Petrobras and BHP, the underlying growth is even better and amounted to 5.3% this summer, a level which, according to the management company, is in line with “the long-term trend “.

“The total amount paid is, however, slightly higher than our forecasts, as is the quality of the dividends, since they are less dependent on exceptional dividends and currency effects than we anticipated three months ago,” specifies Ben Lofthouse, head of the global equities team.

Generous Chinese companies

From a sectoral point of view, here too, there are very glaring disparities. Asian chemical and real estate companies have cut their dividends sharply, “reflecting difficult market conditions in the region.”

In contrast, dividends paid by banks, utilities and automobiles, as well as most oil companies, recorded strong growth. Overall, “nine out of ten companies increased or maintained their distributions”.

If we focus on geographic regions, Asian companies have remained generous with their shareholders, particularly in China. Dividends reached a “new record in the country thanks to a sharp increase in payouts from PetroChina”, but this development masked the weak return to shareholders of Chinese banks and real estate companies.

In the United States, dividends increased by 4.5%, a growth rate described as “healthy” by Janus Henderson. An overwhelming majority (98%) of U.S. companies increased or maintained their distributions.

European companies maintained “very strong growth” in their dividends, extending the trend observed during a seasonally significant second quarter. In the United Kingdom, the situation is more disparate. Mining companies have been less generous with their shareholders, which has obscured the increase in coupons paid by banks, oil groups or community services.

In France, underlying dividend growth stood at 11.6% between July and September. This rate is twice lower than the region’s average (22.6%), but remains significantly higher than the world average (0.3%). In detail, this underlying dividend growth was driven by two groups, namely Publicis and Pernod Ricard.

Record dividends for France

For the full year 2023, Janus Henderson’s forecasts have been revised slightly downwards, due to the reduction in special dividends and the appreciation of the dollar. This revision is however not a cause for concern, specifies the asset manager, because the underlying increase in dividends over 2023 “makes this growth more qualitative than expected”.

Janus Henderson’s overall forecast for 2023 is therefore lowered from $1,640 billion to $1,630 billion. But year-on-year, the total amount of dividends remains up, by 4.4%.

Several countries, including the United States, Canada, Switzerland and China, are on track to pay record dividends. The manager is also optimistic for “France (which) should post record distributions this year”, since it is based on the amounts of “dividends already announced for the fourth quarter”.

Underlying growth is therefore expected to exceed forecasts, as it “is not affected by exchange rates and non-recurring special dividends”. Janus Henderson is therefore revising its underlying growth forecasts upwards, from 5.0% to 5.3% for the whole of 2023.