- Global dividends fell $108.1bn to $382.2bn in the second
quarter
- The headline 22.0% decline (19.3% underlying) was the worst
since JHGDI was launched in 2009
- All regions saw lower payouts except North America, where
Canadian payments proved to be resilient
- Europe and the UK were worst affected
- Healthcare and communications dividends proved resistant to
cuts, but financials and consumer discretionary payouts fell
sharply
- Janus Henderson now expects headline global dividends to fall
17% in a best-case scenario, paying $1.18 trillion. This equates to
a fall of 19% on an underlying basis
- The worst-case scenario could see payouts drop 23% at the
headline level to $1.10 trillion, equivalent to a 25% underlying
decline
In a quarter of astonishing disruption to normal life around the
world, the impact on dividends was equally dramatic. According to
the latest Global Dividend Index from Janus Henderson, total
payouts fell by $108.1bn to $382.2bn, the lowest second-quarter
total since 2012. The 22.0% headline fall equated to a decline of
19.3% on an underlying basis and was easily the worst quarterly
drop since the index started at the end of 2009 post the global
financial crisis (GFC). More than a quarter (27%) of Q2 payers cut
their dividends, and more than half of this group cancelled them
outright.
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Janus Henderson’s index of global payouts fell to 182.2, a level
last seen in the second quarter of 2018. Dividends fell in every
region of the world, except in North America, thanks in particular
to resilience among Canadian companies. There was a very wide
variation by country and by industry. The worst affected regions
were Europe and the UK, where payouts fell by two fifths on an
underlying basis. A particularly difficult quarter for France,
Europe’s largest dividend payer, saw total dividends reach their
lowest level in at least a decade, though some of the lost French
income will be restored later in 2020.
At the other end of the European scale, Swiss payouts barely
changed year-on-year. In Asia, Australia saw the greatest impact,
with more expected to come in the third and fourth quarters, while
Japan was relatively insulated.
Industry trends showed that healthcare and communications
dividends proved resistant to cuts, while financials and consumer
discretionary payouts were particularly vulnerable.
Given the Q2 figures, Janus Henderson has revised its best- and
worst-case scenarios for 2020. The team’s expectations of which
dividends would be cut, and which were safe, proved accurate but it
is now clearer how companies whose payments were considered
‘vulnerable’ are likely to behave. This means the range for
dividend payments has narrowed from the -15% to -35% underlying
drop estimated three months ago when there was much less
certainty.
Janus Henderson’s best case now sees dividends falling 19% in
2020 on an underlying basis, equivalent to a 17% headline decline,
yielding a best-case total of $1.18 trillion. Janus Henderson’s
worst case sees an underlying fall of 25%, equivalent to a 23%
headline decline. That would generate total global payouts of $1.10
trillion. This means that not only has the uncertainty for the year
diminished but the mid-point estimate has improved by two
percentage points too. Even so, 2020 will be the worst year for
dividends since the global financial crisis.
Matt Peron, Director of Research at Janus Henderson, said:
“Dividends are an important part of investors’ total returns as
well as a sign of the health of the underlying business, so it is
important to track them as we do with our one-of-a-kind index.
While dividends have taken a reset in most regions, especially in
Europe, due to the recent economic disruption, we expect to see a
rebound in 2021 and a resumption of the strong trends in this very
important source of return for investors in the coming years.”
Past performance is no guarantee of future results.
International investing involves certain risks and increased
volatility not associated with investing solely in the UK. These
risks included currency fluctuations, economic or financial
instability, lack of timely or reliable financial information or
unfavourable political or legal developments.
Notes to editors
Janus Henderson Group (JHG) is a leading global active asset
manager dedicated to helping investors achieve long-term financial
goals through a broad range of investment solutions, including
equities, fixed income, quantitative equities, multi-asset and
alternative asset class strategies.
Janus Henderson has approximately US$336.7B in assets under
management (as of June 30, 2020), more than 2,000 employees, and
offices in 28 cities worldwide. Headquartered in London, the
company is listed on the New York Stock Exchange (NYSE) and the
Australian Securities Exchange (ASX).
Methodology
Each year Janus Henderson analyse dividends paid by the 1,200
largest firms by market capitalisation (as at 31/12 before the
start of each year). Dividends are included in the model on the
date they are paid. Dividends are calculated gross, using the share
count prevailing on the pay date (this is an approximation because
companies in practice fix the exchange rate a little before the pay
date), and converted to US$ using the prevailing exchange rate.
Where a scrip dividend is offered, investors are assumed to opt
100% for cash. This will slightly overstate the cash paid out, but
we believe this is the most proactive approach to treat scrip
dividends. In most markets it makes no material difference, though
in some, particularly European markets, the effect is greater.
Spain is a particular case in point. The model takes no account of
free floats since it is aiming to capture the dividend paying
capacity of the world’s largest listed companies, without regard
for their shareholder base. We have estimated dividends for stocks
outside the top 1,200 using the average value of these payments
compared to the large cap dividends over the five-year period
(sourced from quoted yield data). This means they are estimated at
a fixed proportion of 12.7% of total global dividends from the top
1,200, and therefore in our model grow at the same rate. This means
we do not need to make unsubstantiated assumptions about the rate
of growth of these smaller company dividends. All raw data was
provided by Exchange Data International with analysis conducted by
Janus Henderson Investors.
This press release is solely for the use of members of the
media and should not be relied upon by personal investors,
financial advisers or institutional investors. We may record
telephone calls for our mutual protection, to improve customer
service and for regulatory record keeping purposes.
Issued by Janus Henderson Investors. Janus Henderson Investors
is the name under which investment products and services are
provided by Janus Capital International Limited (reg no. 3594615),
Henderson Global Investors Limited (reg. no. 906355), Henderson
Investment Funds Limited (reg. no. 2678531), AlphaGen Capital
Limited (reg. no. 962757), Henderson Equity Partners Limited (reg.
no.2606646), (each registered in England and Wales at 201
Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct
Authority) and Henderson Management S.A. (reg no. B22848 at 2 Rue
de Bitbourg, L-1273, Luxembourg and regulated by the Commission de
Surveillance du Secteur Financier). Henderson Secretarial Services
Limited (incorporated and registered in England and Wales,
registered no. 1471624, registered office 201 Bishopsgate, London
EC2M 3AE) is the name under which company secretarial services are
provided. All these companies are wholly owned subsidiaries of
Janus Henderson Group plc. (incorporated and registered in Jersey,
registered no. 101484, with registered office at 47 Esplanade, St
Helier, Jersey JE1 0BD).
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subsidiaries. © Janus Henderson Group plc.
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Sarah Johnson Director of Media Relations and Corporate
Communications T: +1 720 364 0708 E:
sarah.johnson@janushenderson.com
Sarah de Lagarde Global Head of Communications T: 44 (0)
2078182626 E: Sarah.delagarde@janushenderson.com
Lia Esbry European PR Executive T: 44 (0) 2078183521 E:
Lia.esbry@janushenderson.com
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