Dividends and Global dividends forecast to rebound in 2021

In a report issued by investment firm Janus Henderson, dividend payouts by the world’s biggest firms in 2020 will fall by 17.5 to 20% or about $263 billion. However in 2021 they could rise 12.2%.

In an article by Marc Jones of Reuters, Janus Henderson noted dividends are a major source of income for public and private pension funds, but companies trying to cope with COVID cut dividends by 11.4% or $55 billion in the 3rd quarter after a $108 billion in April and June. Janus Henderson says in the best case, they see a fall of $1.20 trillion on an underlying basis.

Some companies which cut their dividends earlier this year, have now increased them on the expectations of 2021 being a relatively normal year. The biggest cuts not surprisingly has come from the travel, leisure and retail firms. However, pharmaceuticals, food producers and food retailers all produced higher dividend payouts.

Britain’s banks and oil firms meant payouts were down 42%

Australia’s government ensured banks saw a 40% drop.

US dividends were down 3.9% with the greatest impact on share buybacks.

Japanese payouts were down 16%; Chine had a 3.3% rise and Hong Kong firms were up 10%.

The world’s biggest dividend paying firm is now a tech company. as of December 1, it raised its Q4 dividend 10% and is now the biggest dividend payer.

Linking to dividend paying stocks, the economy continues to evolve if you were to go back 10 years you would see the big oil companies were the biggest dividend payers but now the big tech companies are throwing off so much cash, your portfolio has hopefully changed. Fortunately none of the changes had to be done overnight but over the decade. With dividend paying stocks, you have the ability to use patience as your guide.

There are more questions than answers, till the next time – to raising questions.

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