A Swiss company is one of them: They are the world’s largest dividend payers

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Good news for dividend hunters: According to the current “Janus Henderson Global Dividend Index”, worldwide dividends increased by 5 percent, reaching a record value of $1.66 trillion in 2023. Last year’s fourth quarter was particularly encouraging; Distributions increased 7.2 percent, driven by strong performance in Europe, the United Kingdom and Japan.

The index is a long-term study of global dividend trends. The distributions of the 1,200 largest companies are analyzed on a quarterly basis.

3 Swiss companies are shaping dividend levels

A total of 22 countries recorded record dividend payments, including Switzerland, the USA, France, Germany and Italy. Dividend payments in Switzerland reached $48 billion. But growth was quite slow compared to Europe and the rest of the world, with an adjusted increase of only 3.4 percent.

Europe, excluding the UK, proved to be a driving force, contributing two-fifths of the global increase. Adjusted distributions in the region rose 10.4 percent to a record $301 billion. Dividend payments in the US reached $602 billion in 2023, an increase of 5.1 percent compared to the world average. U.S. dividends have increased every year since 2011, including the pandemic, and are now three times higher than in 2010.

In Switzerland, half of dividend volume comes from just three companies: Roche, Novartis and Nestlé. These companies grew their earnings per share very slowly; It has been overshadowed by the much faster growth of mid-sized companies such as shipping company Kuehne & Nagel, cement maker Holcim and luxury goods maker Richemont.

Banks, mining, car manufacturers

While at a sector level banks contributed half of global dividend growth, their Swiss counterparts were an exception. The high interest rate environment has allowed many financial institutions to increase their margins. But the positive impact of higher bank dividends has been largely offset by disruptions in the mining sector, whose profits have fallen in line with lower commodity prices. Automakers contributed one-eighth of global dividend growth in 2023 with record payouts.

86 percent of the companies studied increased or maintained their dividends. HSBC, which recorded the biggest increase of all companies, returned to full quarterly payments.

The major British bank is once again one of the world’s three largest dividend payers, along with Microsoft, Apple, Exxon Mobil, Johnson & Johnson, JPMorgan and Nestlé. Cuts at the big five companies (BHP, Petrobras, Rio Tinto, Intel and AT&T) had a disproportionately negative impact.

It became clear in 2023 that the general pessimism regarding the global economy was misplaced. Despite the uncertain outlook, dividends appear safe and have historically shown lower volatility than earnings. Investment firm Janus Henderson projects dividends totaling $1.72 trillion in 2024, representing adjusted growth of 5 percent.

Source :Blick