Global dividends surged to a record $1.47 trillion in 2021, up 16.8% on a headline basis, equivalent to underlying growth of 14.7%, according to the Janus Henderson Global Dividend Index, Edition 33.
Payouts reach new records in a number of countries, including the U.S., Australia, China, and Sweden. However, the report said that growth was fastest in those parts of the world that had seen the biggest declines in 2020, especially Europe, the UK, and Australia.
A large part of the recovery was driven by a limited number of companies and sectors in a few geographies, and one-off special dividends also soared to a new record. Emerging market dividends soared to a new record, driven by the recovery in Brazil, banks and miners delivered three-fifths of the $212bn increase in payouts in 2021, mining payouts reached almost double their previous record in 2019, and consumer discretionary and industrials meanwhile benefited from the recovering economy.
Nevertheless, beneath the big numbers, growth was broadly based – nine-tenths of companies globally increased dividends or held them steady.
A Plan For Reassertion
The report predicts that more normal patterns of dividend growth will begin to reassert themselves in 2022, both from a geographical and sector perspective.
The greatest uncertainty relates to the level of mining dividends in 2022 following their exceptional year in 2021, the report said. “We expect global payouts to reach a new record of $1.52 trillion in 2022, a headline increase of 3.1%, with underlying growth of 5.7%.”
When searching for income-generating investments, ETFs holding dividend stocks have advantages over the traditional fixed income offerings. Dividend stocks can provide a fairly reliable source of income plus the possibility of capital appreciation over time.
Equities that pay dividends are also typically better-positioned in an inflationary environment than the broader equity market or fixed income investments.
Three highly-rated ETFs include the SmartETFs Asia Pacific Dividend Builder ETF (ADIV), the Guinness Atkinson SmartETFs Dividend Builder ETF (DIVS), and the BlackRock iShares Global 100 ETF (IOO).
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