Global dividend payouts to breach US$2 trillion in 2022, says IHS Markit

Global dividend payouts to breach US$2 trillion in 2022, says IHS Markit
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KUALA LUMPUR (Jan 11): Global dividend payouts are expected to continue their upward trajectory in 2022, increasing by 6% from US$1.97 trillion in total in 2021 to US$2.09 trillion (about RM8.76 trillion).

In a statement on Monday (Jan 10), critical information, analytics and solutions provider IHS Markit’s EMEA dividend research lead Clara Besson said though aggregate dividend payouts increased in 2021, the pandemic created starkly uneven paths across countries and sectors.

“Compared to pre-[Covid-19] pandemic levels, dividends increased strongly in Asia-Pacific, grew moderately in the Americas and saw a minimal rebound in Europe.

“Although the technology sector has boomed, travel, leisure and automotive still face an uphill climb,” she said.

Besson added that IHS Markit expects further regional and sectoral disparities due to supply chain disruptions, energy price volatility, inflation and the Omicron Covid-19 variant.

She added that each region will see dividend payout growth, though the strength of the expansion will vary.

Besson said dividends in the US are expected to increase by 5.4% this year to US$670 billion, led by the technology and healthcare sectors.

“Led by payouts from banks, industrials and healthcare companies, European aggregate dividends are expected to grow 5% to US$476 billion in 2022.

“Dividend payout growth will slow in Asia-Pacific from the robust 23% seen in 2021 to 3% in 2022, with dividends expected to reach US$633 billion, an increase of US$115 billion from pre-Covid-19 levels, led by the banking and industrial goods and services industries,” she noted.

Besson said travel restrictions will continue to weigh on the travel and leisure sector with payouts expected to remain US$18 billion below 2019 levels.

Similarly, she said the automobile and parts sector is struggling to recover as supply chain shortages and raw material price hikes compress profitability, and that overall, the sector’s dividend growth will stay 5.3% under 2019 levels with US$8 billion expected to be paid in 2022.

Industrials, the third-largest dividend contributor, are projected to rebound with an additional US$15 billion increase in 2022.

Besson said healthcare and technology companies will continue to see dividend growth, with payouts reaching US$144 billion and US$3 billion respectively. The basic resources sector, the sector recording the largest aggregate dividend increase in 2021, will see payouts decrease by US$9 billion to US$123 billion this year.