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US Dividends Jumped to a New Record in 2021, and Could Reach Fresh Highs In 2022
Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Neutral)
Tags
dividends
Rhea-AI Summary
According to Janus Henderson's report, US dividends reached a record $522.7bn in 2021, marking a 3.5% year-on-year increase, with underlying growth at 5.9%. The technology sector saw a median dividend increase of 8% per share. Forecasts for 2022 predict total dividends to rise by 7.5% to $562bn. The report highlights that nine out of ten companies increased or maintained dividends, with the technology sector being a major contributor to long-term growth.
Positive
Record US dividends at $522.7bn, up 3.5% YoY.
2022 forecast predicts a further increase to $562bn, up 7.5%.
Technology sector median dividend increase of 8% per share.
Nine companies in ten increased dividends or held them steady.
Negative
US market yield is currently the lowest among major markets at 1.3%.
Coupled with high company valuations, this may affect investor returns.
Some companies like Disney and Boeing have not reinstated dividends post-pandemic.
US dividends rose to a record $522.7bn, up 3.5% year-on-year; underlying growth was 5.9%
The median technology sector dividend increase on a per share basis was 8%
For 2022, Janus Henderson expects dividends to rise 7.5% reaching a new record of $562bn
DENVER--(BUSINESS WIRE)--
US dividends rose to a new record in 2021, according to the latest Janus Henderson Global Dividend Study: US Edition. US companies1 distributed $522.7bn, up 3.5% compared to 2020. Underlying growth was 5.9% once adjusted for special dividends. Nine companies in ten increased dividends or held them steady in 2021.
Dividend payout growth accelerated in the fourth quarter, jumping to 11.2% on an underlying basis, reflecting broad-based improvement and the reinstatement of some dividends cancelled during the pandemic. Buybacks added significant additional cash to the total returned to shareholders but drove down total US market yield. It is now the lowest of any major world stock market, having sunk below even Japan.
A new record forecast for 2022
For the year ahead, Janus Henderson expects dividend growth to accelerate in the US, taking the total distributed to a new record of $562bn, up 7.5% on a headline basis. The prospective yield on US shares is 1.3%, far lower than other large, developed countries, and well below its 2% long-run average. In addition to buybacks, the low yield in the US is a function of very high company valuations and sector mix.
Healthcare and financials contributed most to growth in 2021 but tech dividends biggest driver of long-term growth
Technology dividends continued their steady rise, up 5.4% on an underlying basis, although lower one-off special payments mean that the headline total was flat year-on-year at $91.2bn. The median, or typical, dividend increase on a per share basis was 8.0%.
Technology dividends have been the biggest driver of long-term growth, accounting for a quarter of the increase in US payouts in the last ten years. In 2021, technology dividends were more than four times larger than in 2011, increasing their share of the US total from one tenth to one sixth.
Microsoft has comfortably consolidated its position as the biggest dividend payer in the US, accounting for $1 in every $30 of all US payouts. Last year, it distributed as much to its shareholders as all the Italian companies in Janus Henderson’s broader global study combined.
Financials and healthcare companies typically account for one third of the total dividends paid in the US, but they contributed three quarters of the growth in 2021, due especially to healthcare where payouts jumped by a tenth. The cut from Wells Fargo drove a decline in banking dividends, but across the general financials sector there were significant increases from large institutions like Morgan Stanley and Blackstone.
Along with banking, there were a handful of weak spots. Walt Disney and Boeing are among a few casualties of the pandemic that have yet to reinstate their dividends, and these held back media and aerospace payouts overall.
Top 15 US dividend paying companies in 2021
Company
Sector
$bn
Microsoft Corporation
Software & Services
$17.3
AT&T, Inc.
Telecoms
$14.8
Exxon Mobil Corp,
Oil & Gas producers
$14.8
Apple Inc
IT Hardware & Electronics
$14.4
JPMorgan Chase & Co.
Banks
$11.1
Johnson & Johnson
Pharmaceuticals & Biotech
$11.0
Verizon Communications Inc
Telecoms
$10.4
Chevron Corp.
Oil & Gas producers
$10.2
Abbvie Inc
Pharmaceuticals & Biotech
$9.2
Pfizer Inc.
Pharmaceuticals & Biotech
$8.7
Procter & Gamble Co.
Household & Personal Products
$8.3
Philip Morris International Inc
Tobacco
$7.6
Coca Cola Co
Beverages
$7.2
Home Depot Inc.
General Retail
$7.0
Bank Of America Corp.
Banks
$6.6
Matt Peron, Director of Research at Janus Henderson said :“US dividends have grown every year for the last eleven years, barely pausing for breath during the worst phase of the pandemic. At the same time, share buybacks are reaching new record highs. We expect both dividends and buybacks will continue to grow this year as companies seek to return excess capital. This growth should create attractive income opportunities for long-term investors seeking a balance of income growth and the potential for capital gains.”
______________________
1
The study covers the 506 largest US companies by market capitalisation – see report methodology for more details
2
Latest buyback data as at Q3 2021
This press release is solely for the use of members of the media and should not be relied upon by personal investors, financial advisers or institutional investors. We may record telephone calls for our mutual protection, to improve customer service and for regulatory record keeping purposes.
Issued by Janus Henderson Investors. Janus Henderson Investors is the name under which investment products and services are provided by Janus Capital International Limited (reg no. 3594615), Henderson Global Investors Limited (reg. no. 906355), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Equity Partners Limited (reg. no. 2606646), (each registered in England and Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct Authority) and Henderson Management S.A. (reg no. B22848 at 2 Rue de Bitbourg, L-1273, Luxembourg and regulated by the Commission de Surveillance du Secteur Financier). Henderson Secretarial Services Limited (incorporated and registered in England and Wales, registered no. 1471624, registered office 201 Bishopsgate, London EC2M 3AE) is the name under which company secretarial services are provided. All these companies are wholly owned subsidiaries of Janus Henderson Group plc. (incorporated and registered in Jersey, registered no. 101484, with registered office at 13 Castle Street, St Helier, Jersey, JE1 1ES).
