Global Dividends Q3 2016 – trends and stats

The Henderson Global Dividend Index Edition 12 is now available for Q3 2016. This report looks at trends in global dividends and compares dividend growth by regions and industry. Which region had the fastest dividend growth? Where were dividends cut? Which company paid the biggest dividend amount in Q3 2016? Read on to find out!

Henderson Global Investors plc publishes a monthly report of its “Global Dividend Index”, and the latest report for Global Dividend Index for November 2016 is available. The data in the report ranges from 2009 when the index was started until the end of the third quarter in 2016 (September).


Disclaimer

The report is free to view and download with no subscription required. Henderson is an asset management company with their own investment trusts. I have no association or affiliation with them, do not own any of their funds and have no plans to buy any of their funds.


I just think the report they’ve produced is interesting and may be of interest to others in the community.

Although it’s described as an Index, it’s not an investable index as in a mutual fund / investment trust. The company totals the gross dividend payments from the 1200 largest companies globally, categorizes the payments by region and sector and then shows the trend in the dividends based on those categories. Methodology and calculation rules are defined in the report.

Overall, global dividend payments for Q3 fell by 4.0% to $281.7 billion, a$12 billion lower than last year.

Here’s a look at a couple of areas of interest, starting with the US.

Dividend Growth of the US

The North American region continues to pay 43% of the world’s dividends but payments declined 7% since this time last year. This is predominately from the US and some of the loss is caused by Kraft Heinz’s special dividend last year which boosted 2015 results. Underlying growth was about 3%, the slowest growth rate yet since 2009.

Canadian dividends fell for the 12th consecutive quarter. Weak exchange rates and stock prices pushed a number of Canadian companies out of the top 1,200 list and so out of the index.

Growth of US Dividends vs Global on an indexed basis. Source: Henderson Global Dividend Index November 2016.
Growth of US Dividends vs Global Dividends on an indexed basis. Source: Henderson Global Dividend Index November 2016.

Dividend Growth of Europe (ex-UK)

Few European companies pay dividends in Q3. But those that did caused a 15% increase in dividend payments over Q3 2015.

Growth of EU Dividends vs Global Dividends on an indexed basis. Source: Henderson Global Dividend Index November 2016.
Growth of EU Dividends vs Global Dividends on an indexed basis. Source: Henderson Global Dividend Index November 2016.

Dividend Growth of the UK

UK Dividends fell almost 14% this quarter, this decline was helped by the fall in the value of sterling which was 15% lower against the dollar than Q3 2015. Underlying growth was -3%, with cuts from Barclays and Rolls Royce pushing the number down.

Growth of UK Dividends vs Global Dividends on an indexed basis. Source: Henderson Global Dividend Index November 2016.
Growth of UK Dividends vs Global Dividends on an indexed basis. Source: Henderson Global Dividend Index November 2016.

Global sector performance

Here’s the summary of industry sectors and their relative dividend performance.

Growth of Global Dividends by Industry on an indexed basis. Source: Henderson Global Dividend Index November 2016.
Growth of Global Dividends by Industry on an indexed basis. Source: Henderson Global Dividend Index November 2016.

The Technology sector continue to pay the most dividends, followed by Consumer Cyclical. Utilities pay the least, although the Basic Material sector is currently on a mission to earn that distinction.

The top 5 dividend paying companies in Q3 2016

Rank Q3 2015 Q3 2016
1 China Construction Bank Corp. China Construction Bank Corp.
2 Kraft Foods Group Taiwan Semiconductor Manufacturing
3 China Mobile Ltd Commonwealth Bank of Australia
4 Taiwan Semiconductor Manufacturing China Mobile Ltd
5 Commonwealth Bank of Australia Royal Dutch Shell

Summary

Although total dividends were down in Q3 2016 compared to 2015, some of the decline is attributed to seasonal effects in parts of the world. But the main factor has been the slowing of dividends in the US this quarter.

Large US companies tend to be diversified internationally, but owning international companies allows extra diversification across different market regions. The US currently pays the most dividends but other regions may grow faster in the future. I invest in both US (VHDYX) and International dividend stocks (VIHAX) and I aim for a 2:1 ratio between the two funds. That’s 2/3 in US and 1/3 in International.

2 thoughts on “Global Dividends Q3 2016 – trends and stats”

  1. What a cool report. Thanks for sharing.

    What on earth is going on in Japan at the moment? Some of those companies have never been particularly generous with dividends (even though they can afford to be), but it looks like divs have picked up pretty strongly their in 2016. I suppose some might be currency effects, but its still an interesting trend.

    1. Hi ADI,
      Yes it’s an interesting read.
      Japan looked like it was helped by favorable exchange rates into dollars (the currency of the index) especially in Q2 and again in Q3. Plus it seems that additional Japanese companies entered into the top 2,000 companies which boosted the regions results a little.
      But Japan’s certainly on an upwards track since Q1 ’15 and is the fastest growing region of the index over the last 2 years.
      Thanks for stopping by.
      Best wishes,
      -DL

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