According to a Reuters analysis of Refinitiv data for 3,394 global companies with a market capitalization of at least $ 1 billion, their total payments to shareholders are estimated at $ 1.37 trillion in 2021.
Dividends fell last year amid the COVID-19 pandemic and as regulatory constraints and government pressure to restrict payments weighed in.
“The robust growth in dividend payouts by global companies reflects the sharp decline in profits after weakness due to the pandemic. Dividend payments are normalizing alongside economic stability and corporate confidence, ”said Geoffry Dailey, senior portfolio manager at BNP Paribas Asset Management.
“Capital markets are accessible and corporate balance sheets are healthy, which further strengthens the ability of companies to increase their dividends. ”
Data showed that European business payments in 2021 are estimated at $ 252.4 billion, a 25% increase from last year. US dividends are expected to reach $ 562.3 billion, an increase of 8.6%.
Mining companies have dominated dividend payouts, boosted by a surge in commodity prices this year, the data shows.
The financial sector is also expected to generate higher dividends, as global central banks such as the Federal Reserve and the European Central Bank relaxed their restrictions on dividends and redemptions they imposed last year.
“Globally, 90% of companies have increased their dividends or held them stable – a very solid reading,” Janus Henderson said in a report this month.
The asset manager calculated that global companies delivered a record $ 403.5 billion in the third quarter, up 22% from the same period last year.
According to the data, the MSCI World Index futures dividend yield stood at 1.72, lower than a 10-year average of 2.45.
“The question investors should always ask themselves is whether this outlook is properly captured in stock prices,” said Jonathan Spread, senior portfolio manager, global equities at Mondrian Investment Partners.
“With US dividend yields currently well below (their) historical average, a lot is already factored in,” he added.
“We believe Japan has the best combination of future dividend growth and current yield, supported by the strength of Japanese corporate balance sheets.”
Among the major countries, UK companies offer a 12-month forward dividend yield of 3.4%, compared to 2.2% for Japanese companies and 1.3% for US companies.