Flashback Sequence

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What's going on?

Dividend payouts are on course to hit $1.4 trillion this year, as – cue the wavey camera effect – companies and investors are reminded what it was like back in the good old days.

What does this mean?

Companies paid out $472 billion worth of dividends in the second quarter of 2021, up 26% from the same time last year. And sure, the jump was always going to look big given that companies were clinging onto as much cash as they could a year ago. But even if you block out the last twelve months (and we often try), payouts were only 7% lower last quarter than they were at the same time in 2019. In other words, we’re edging closer and closer to pre-pandemic levels. That gap’s only set to close too: research out on Monday from Janus Henderson showed that 84% of companies are planning to maintain or increase their dividends this year. That would bring total shareholder payouts this year to $1.4 trillion – just 3% below the beforetimes.

Why should I care?

For markets: Who are the big payers?


If you’re looking for the biggest dividend-payers, mining companies – whose earnings came back swinging with commodity prices earlier in the year – could be a good bet, along with industrials, banks, and consumer discretionaries (tweet this). “Defensive” sectors like consumer staples and telecoms, meanwhile, are lagging behind, while the pandemic-battered travel and leisure industries need every dollar they have right now.



The bigger picture: Where are the big payers?


As for where in the world to look, the UK and Europe – whose second-quarter payouts were up 61% and 66% respectively – are good leaping-off points, while Canada helped drive North American payouts to a record high. Asia’s 45% dividend growth looks good too, with Korean giant Samsung even poaching the title of world’s biggest dividend payer from Switzerland’s Nestlé. You’d do well to avoid emerging markets, though: the pandemic’s still giving their economies a particularly hard time, and their payouts fell 3% versus the same time last year.

Originally posted as part of the Finimize daily email.

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