Global dividend income reaches record high
17/02/2015
Worldwide dividend income paid to shareholders increased by 11% in 2014, reaching a record high of $1.167 trillion.
The report, which was published by Henderson Global Investors suggested that companies in the US paid the largest share of dividends, at a total of $52 billion.
The latest increase means that the value of global dividends has risen by 60% in the five years from 2009. This rate of growth has proved valuable to dividend income investors, as it has outstripped savers interest rates, inflation and even the growth of world economies.
However, despite this considerable growth, Henderson Global Investors warned that global dividend growth would slow this year, and would increase by just 1%.
The investment company said that the reason they expect such a drastic slowdown in dividend income is largely down to plummeting oil prices, slowing economies and the strong value of the US dollar.
Alex Crooke, from Henderson Global Investors said: "2014 was a superb year for income investors, with developed markets leading the charge."
"After such a strong performance in 2014, we now expect a pause for breath in 2015."
Uneven spread
Whilst global dividends did increase significantly last year, it is also worth noting that a return is not necessarily predictable, as these payments are not spread evenly among companies.
In 2014, 10 firms were responsible for 11% of all global dividend payments, whilst the 20 biggest dividend paying companies were responsible for 18% of all dividends.
In the UK, Vodafone were responsible for around 20% of all dividend payments, whilst other big payers throughout the world have included Apple and Microsoft, as well as HSBC and Shell petrol.
Some firms actually cut their dividend payments too, especially in the raw materials sectors, as it was reported that mining firms cut their dividends for the third year in a row.
The report blamed these cuts on lower prices and a slowing global demand of mining products.
Over the next 12 months, it is not expected that all oil companies will pay big dividends either, as the price of oil has plummeted in recent months.
Alex Cooke said: "We don't expect developed market oil companies to reduce their dividends in 2015, but there is a strong likelihood that emerging market producers will pay out markedly less this year as their profitability comes under pressure."
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