In the latest edition of its Dividend Index, the asset manager said on a global level, dividends rose 11.4% year-on-year in the second quarter to $426.8bn, largely on the back of a strong performance from Europe.
Europe ex-UK saw dividends up 18.5% to $153.4bn in what is the most important quarter for European dividend payments. While still behind the global average, the HGDI Europe index hit a record 123.4 and in constant currency terms represents Europe’s best performance in at least five years.
“Excluding special dividends, underlying pay-outs still grew rapidly, up 16.4%. Index changes, which brought more European stocks into the global top 1,200 this year, added 4% to the growth rate,” the report noted.
On a geographical basis, France was the best performer, up 30.3% to $40.7bn, but Henderson noted, 4% of this was due to index changes, while 7% was due to currency moves. Switzerland grew dividends 19.3%, the report said, while Germany rose only 3.9%, it said.
Adding: “Austria and Belgium are the only countries to see a like-for-like cut in US dollar terms (both were down by approximately 4%) as Erste Bank and KBC suffered from weak conditions in Eastern Europe.”
In the UK, the picture was slightly more muted. Dividends rose 9.7% to $33.7bn in the second quarter, but Henderson said, the rising pound was responsible 6.9% of the US dollar increase. According to Henderson, UK firms are seeing slow growth in local currency terms at present.
Japan too put in a good showing in the second quarter, which along with the fourth quarter is a seasonally important one. According to Henderson, dividend pay-outs jumped 18.5% year on year to $25.2bn. This, it said was the largest individual quarter on record.
According to the report, if the current trajectory is maintained, it is conceivable that the world’s listed companies will pay out $100bn more this year than in 2013, but it says this is by no means guaranteed.
In a press release accompanying the report, Alex Crooke, head of global equity income at Henderson Global Investors said: “2014 looks set to deliver the fastest growth in global dividends since 2011, only this time, most of that growth will come from increases in pay-outs from firms themselves, rather than from swings in currencies. In 2011, more than a third of the growth came from a falling US dollar.”
