If the signs of deterioration in the global economic situation are increasing, the reversal of the trend is not yet on the agenda for the dividends paid to their shareholders by companies listed on the stock exchange. In total, the 1,200 largest companies in the world distributed 568.1 billion dollars (526 billion euros approximately) in the second quarter alone, according to the study by the asset management company Janus Henderson published on Wednesday August 30. An amount up 4.9% over one year, excluding exceptional payments.
This still sustained growth is, after all, logical, since the dividend corresponds to a fraction of the profits made during the year preceding its payment. Those paid this year therefore reflect the growth in profits recorded in 2022, which have reached historic levels, thanks, among other things, to the continuation of the post-Covid rebound, the surge in energy prices and the rise in interest rates. Thus, 88% of companies maintained or increased their dividends in the April-June quarter.
Thanks to the increase in rates, which supports bank profits, the financial sector was the main driver of this increase in dividends in the second quarter: on a global scale, the sums distributed by banks jumped by 19.7% in one year, to 85.3 billion dollars – a record.
“A very powerful positive effect on bank margins”
Emblematic, the French BNP Paribas, with 4.8 billion euros in dividends distributed, finds the sixth place in the world ranking of the main payers of dividends. The 3.90 euros per share paid on May 22 provide shareholders of the leading European bank with a return of 6.5% at the current price. Another establishment, the British HSBC, distributed more than expected and could be the first contributor to the global growth in dividends over the whole of this year.
“A less buoyant economic climate is generally unfavorable to banks, but the end of this period of very low interest rates has a very powerful positive effect on the margins of banking establishments”explains Ben Lofthouse, one of the leaders of the Janus Henderson study.
The generosity of banks towards their shareholders thus partly offsets the drop in dividends observed in the mining sector, which undermines the growth of dividends in the United Kingdom (+2.9%).
In addition to BNP Paribas, four French companies appear in the top 20 established by Janus Henderson: the pharmaceutical group Sanofi, the insurer Axa, the luxury group LVMH and the energy supplier Engie. Thanks in particular to the 65% jump in the latter’s coupon, dividends paid by French listed companies increased by 10.3% in total in the second quarter, to 53.9 billion dollars (49.5 billion euros). euros). France alone thus represents nearly 30% of the sums distributed by listed companies in Europe, excluding the United Kingdom.
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