Henderson Global Dividend Index - November 2016

Edition 12

  • Global dividends fell 4.0% in Q3 to $281.7bn, weakest performance since Q2 2015
  • Lower US special dividends made a significant impact to the headline rate, but underlying US dividend growth has also slowed
  • Seasonal shift to weaker areas of the world – China, Australia and UK
  • On an underlying basis, dividends were 0.3% lower

What is the Henderson Global Dividend Index?

The Henderson Global Dividend Index (HGDI) is a long-term study into global dividend trends, and is the first of its kind. It is a measure of progress that global firms are making in paying their investors an income on their capital. It analyses dividends paid every quarter by the 1,200 largest firms by market capitalisation.

US dividend growth slows to post-crisis low

Global dividends fell to $281.7bn in the third quarter, down 4.0% year-on-year, according to the latest Henderson Global Dividend Index (HGDI), a long-term study of global dividend trends. This was the weakest performance since the second quarter of 2015. Three main factors are behind the decline. First, special payouts were lower, particularly in the US. Secondly, the third quarter sees a seasonal peak from areas of the world that currently have weaker dividend growth such as emerging markets, Australia, and the UK. And finally, dividend growth in the US has slowed. As the largest contributor to dividends, a slowdown here makes a significant impact. On an underlying basis, which strips out exchange rate movements and other less factors, the global total was 0.3% lower.

 

Key Highlights

  • Global dividends fell 4.0% in Q3 to $281.7bn, weakest performance since Q2 2015
  • Lower US special dividends made a significant impact to the headline rate, but underlying US dividend growth has also slowed
  • Seasonal shift to weaker areas of the world – China, Australia and UK
  • On an underlying basis, dividends were 0.3% lower
  • Henderson has slightly reduced 2016 dividend growth forecast to 0.9% in headline terms, and 1.0% in underlying terms
  • Total global dividends for 2016 expected to be $1.16 trillion

All figures as at 30.09.2016, Henderson Global Investors

Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

This information does not qualify as an investment recommendation.


Glossary of terms

Equity Dividend Yields - A financial ratio that shows how much a company pays out in dividends each year relative to its share price.
Headline dividends – The sum total of all dividends received.
Headline Growth – Change in total gross dividends.
Special dividends – Typically, one-off payouts made by companies to shareholders that are declared to be separate from their regular dividend cycle.
Underlying dividend growth – Headline dividend growth adjusted for special dividends, change in currency, timing effects and index changes.

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