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BHP, AstraZeneca and Shell among world’s top divi payers as shareholders gear up for record year of returns

Published: 22:45 20 May 2019 AEST

UK firms paid out almost US$21bn in dividends in the first quarter
UK firms paid out almost US$21bn in dividends in the first quarter

A special dividend from mining giant BHP Group PLC (LON:BHP) helped London-listed companies to pay out more than US$20bn in the first quarter of 2019.

Back in January, BHP paid out an extra US$5.2bn on top of its US$0.9bn ordinary dividend as it returned the proceeds of its US oil asset disposals to shareholders.

READ: High FTSE yields point to 'dividend slaves' that may cut pay-outs

According to asset manager Janus Henderson, that meant UK companies shelled out US$20.7bn in dividends in the three months to the end of March.

The total is 10.5% higher than the same period of 2018, although underlying growth was a more modest 4.5% when adjusting for the weaker pound and BHP’s one-off bonanza. That was “in line with the longer term trend” for the UK, Janus Henderson said.

UK growth outpaces Europe

Still, headline growth comfortably outpaced the rest of Europe, where dividends rose by 9.2%, led by pharma goliath Novartis, which was the world’s highest-paying stock in the first quarter.

“UK dividends have grown at just over half the pace of the rest of the world since 2009, only a little faster than the rest of Europe,” said Henderson Janus in its report.

“This reflects the sector concentration in the UK (with a heavy reliance on slower growth oil and banking stocks), and higher pay-out ratios that provide less room for expansion.”

Three UK companies made it into the global top 20: as well as BHP, Royal Dutch Shell PLC (LON:RDSB) and AstraZeneca PLC (LON:AZN) featured towards the top of the leaderboard in the first quarter.

US companies dominate

The list was dominated, perhaps unsurprisingly, by US companies, who typically reward shareholders once every quarter.

AT&T, Microsoft, Exxon Mobil, Apple, JP Morgan Chase, PepsiCo, Verizon, Johnson & Johnson, Chevron and Wells Fargo were all among the 20 top dividend payers in the period.

In fact, the US and Canada broke all-time records, with the total pay-out hitting US$133.1bn, with almost 90% of US companies on the index hiking their dividends.

Overall, global dividends rose 7.8% to an all-time high of US$263.3bn in the quarter.

2019 set to be a record year for dividends

That sets the scene for what Janus Henderson is predicting will be a record year, with analysts forecasting US$1.43trn will be returned to shareholders in 2019.

“Market expectations for corporate earnings have moderated in recent months as global economic momentum has slowed and forecasts may yet come down a bit further,” said Janus Henderson.

“Nevertheless, we do not yet feel any need to make changes to our 2019 dividend forecast. For the full year, we continue to expect global dividends to reach a record US$1.43 trillion, up 4.2% in headline terms, and 5.2% on an underlying basis.”

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