Q3 delivered another excellent quarter for global dividends as the continuing strength of the world economy boosted corporate profitability around the world, according to the latest Global Dividend Index from Janus Henderson.
Payouts rose 5.1% to a comfortable third-quarter record of $354.2bn. The United States, Canada, Taiwan, and India all saw all-time record quarterly payouts, while Chinese dividends returned to growth, after three years of contraction.
Ben Lofthouse, head of global equity income at Janus Henderson said: “The third quarter exceeded our expectations, but more importantly, the quality of growth was better than we expected. It came despite a negative impact from exchange rate moves and a lower level of special dividends. Importantly, our core underlying measure of growth was strong. 2018 may be a volatile and more challenging year for stock markets, but steady profit growth means dividends should continue to make steady progress.
Expectations for corporate earnings growth in 2019 are starting to come under some pressure, given the late stage of the economic cycle. That is not to say that profits themselves are set to fall, however, rather that the pace of expansion may now be slower than previously thought. Growing profits and strong cash flow mean that dividends should continue to be well supported and so investors seeking an income from their shares should feel confident about the year ahead.”