Global dividends fell 12.2% in 2020 to reach $ 1.255 billion, a drop less than expected thanks to a fourth quarter saving, according to a study published Monday February 22.
Read also: Coronavirus melts dividends
Despite the health context, two-thirds of companies worldwide have managed to increase or maintain their dividends, says the report of asset manager Janus Henderson.
However, one in eight companies have completely canceled their dividends and one in five reduced them.
"The impact of the pandemic on dividends followed the trend of a classic recession and its incidence was, on an international scale, less severe than following the global financial crisis"
of 2008, points out the study.
In the fourth quarter alone, global dividends fell (-9.4%) less sharply than expected, several companies having notably restored their payment in full or in part.
Microsoft, the world's largest dividend payer
Significant differences were observed from one region to another and between the different sectors of activity.
In North America, for example, dividends rose 2.6% to
“a new record”
($ 546 billion, almost half of the global total) in 2020, in particular because companies protected their dividends by suspending or reducing, instead, share buybacks, the study explains.
US software giant Microsoft became the world's largest dividend payer in 2020.
China, Hong Kong and Switzerland also fared well, as half of the dividend cuts worldwide in 2020 were in Europe.
And for good reason: at the request of regulators in 2020, the European banking sector had to stop the distribution of dividends for a time.
The same ban had been made in the United Kingdom.
Thus, banks represented, in value, a third of dividend cuts internationally, three times more than oil producers, the second most affected sector.
Read also: Dividends fell 22% worldwide in the second quarter
Conversely, defensive companies such as food retailers, pharmaceuticals and skincare companies
“held up well”
.
France is, along with Spain, the country that canceled dividend payments the most last year, mainly due to banks.
For 2021, Janus Henderson estimates that dividends should resume
"from April"
and forecasts in his most optimistic scenario a rise in global dividends of up to 5%, to 1.320 billion dollars.
However, its most pessimistic scenario envisages a drop of around 2%.
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