Advertisement
UK markets closed
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • FTSE 250

    19,884.73
    +74.07 (+0.37%)
     
  • AIM

    743.26
    +1.15 (+0.15%)
     
  • GBP/EUR

    1.1712
    +0.0019 (+0.16%)
     
  • GBP/USD

    1.2623
    +0.0001 (+0.01%)
     
  • Bitcoin GBP

    55,818.16
    +204.15 (+0.37%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • CAC 40

    8,205.81
    +1.00 (+0.01%)
     

Where in the world have dividends risen by 27pc?

Japan posted significant dividend growth, boosted by Nintendo  - AP
Japan posted significant dividend growth, boosted by Nintendo - AP

Japanese and emerging market companies - not normally associated with investment income - have posted the biggest dividend increases of any region over the past year, new data has shown.

In the second quarter of 2017, the underlying dividends paid by emerging market companies were 27pc higher than in the previous year.

Japanese companies increased their underlying dividend payments by 11.8pc over the same period.

The report, from fund company Janus Henderson, found that global dividends hit an all-time quarterly high of £347bn in the second three months of 2017, thanks to a 7.2pc increase in underlying dividends worldwide. 

ADVERTISEMENT

"Underlying" means excluding special dividends and before the effects of exchange rates are taken into account.

Every region experienced significant growth, with British firms growing their payments by 6.1pc, their North American counterparts by 6.3pc and European businesses by 5.8pc.

How those figures translate for UK investors depends heavily on the performance of the pound versus the currency used by the company concerned, but the figures demonstrate the growing options available to income seeking investors outside the UK.

Global dividend growth by region
Global dividend growth by region

In emerging markets, payments diverged between countries, but only Chile saw underlying dividends fall. In Brazil, the giant mining group Vale restored its dividend, more than quadrupling the country’s total.

Indonesia was the biggest emerging market contributor, paying £2.9bn in dividends in the second three months of the year, with every company increasing its payout.

Few Chinese companies were captured by the data, as they typically pay dividends in the third quarter of each year, according to Janus Henderson.

In Japan, which has been increasingly developing a culture of rewarding shareholders, Nintendo and Mitsubishi Corporation accounted for the biggest increases.

Globally, the 20 largest second-quarter dividend payers accounted for 17pc of all dividends paid.  Swiss firm Nestle has claimed the crown as the largest payer during this period for the past few years. 

Alex Crooke of Janus Henderson said: “The global economy is very supportive for company profits and dividends at present. The improvement reflects a normalisation in dividend growth, following two years during which it had been rather subdued."

While he said investors would be enjoying this rare period of synchronised dividend growth, he explained that a "global approach" to income investing was still wise, as it would provide protection against a slowdown in any individual region. 

 

Listen now: It's Your Money Podcast
Listen now: It's Your Money Podcast