(Paris) Companies have once again been generous to their shareholders by paying them 1.560 billion dollars in dividends in 2022, a new record set in part thanks to oil and gas companies, before a promising year 2023, according to a study published on Wednesday.
Huge corporate profits and dividends paid out in 2022, as the global economy falters and inflation stifles purchasing power, have reignited the debate about taxing windfall “superprofits” but also value sharing with the employees.
The total amount of dividends paid is up 8.4% compared to 2021, the previous record year thanks to the rebound in global economic activity after the health crisis, according to a report by asset manager Janus Henderson.
Oil and gas producers and financial companies accounted for half of this growth, according to the Global Dividend Index, which lists the 1,200 largest market capitalizations.
Due to soaring energy prices which inflated their profits, they “increased their distributions by more than 66%, in the form of ordinary or extraordinary dividends”, specifies the asset manager.
The banks continued to benefit from the reauthorization of dividends, after they were frozen by the European Central Bank at the start of the pandemic: they contributed a quarter of the overall increase.
The maritime transport sector benefited from the increase in freight, in particular for the Danish Maersk, the automotive sector from the increase in car prices and the luxury sector from the continuous increase in demand.
These last two sectors are the “engine” of dividend growth in Europe, although “special payments” from French energy companies TotalEnergies and Norwegian Equinor have “also contributed significantly”.
In 2021, mining companies had been in the spotlight, with four companies in the top 10 of the entities having paid the most dividends. The year 2022 has seen the price of commodities drop slightly, causing their dividends to decline.
But the Anglo-Australian mining company BHP remains on the first step of the podium while its counterpart Rio Tinto remains in 7e place.
The 2022 podium is completed by the Brazilian state oil company Petrobras and the American computer giant Microsoft. Next come Apple, China Construction Bank, China Mobile, JPMorgan Chase and Johnson & Johnson.
Towards new records
Twelve countries recorded record dividends denominated in dollars, the United States, Canada, Brazil, China, India as well as Taiwan, and several others in their currency, France, Germany, Japan and Australia.
While emerging markets grew “by about a fifth”, more traditional markets like the United States saw growth relatively “lower than the rest of the world”.
Dividends had held up well during the pandemic in the country, which is also less exposed to sectors that have exploded this year. Seven of the companies in top 10 of Janus Henderson remain American.
Two sectors contributed strongly to the growth of US dividends: energy (with a large exceptional payment for Pioneer Natural Resources and large dividends for Chevron and Exxon) and financial companies (with Wells Fargo, Morgan Stanley and Blackstone in particular) .
Chevron and Exxon also matched their dividends with huge share buybacks, which also hit record highs in 2022.
In France, the country which contributed the most to the growth of dividends in Europe with 59.8 billion euros (+4.6%), TotalEnergies and LVMH were the biggest payers of dividends.
According to Janus Henderson, 88% of companies (95% in France) increased or maintained their dividends in 2022.
“As for the year ahead, the dividend outlook is more uncertain,” said Jane Shoemake, portfolio manager, quoted in the press release.
The asset manager is still counting on a new record of 1600 billion dollars in dividends distributed, these being “less volatile than profits”, i.e. slower growth than in 2022 (+ 2.3%) .
“Inflation, the scale of further rate hikes and geopolitical risks are clouding the horizon,” adds Mr.me Shoemake.