After an eight percent contraction in 2020, global dividend payouts rebounded last year, increasing by 21 percent. Total dividend payouts are expected to continue this upward trajectory in 2022, increasing by 6.0 percent from 1.97 trillion USD in 2021 to 2.09 trillion USD, according to a new report from IHS Markit (NYSE: INFO), a world leader in critical information, analytics and solutions.
“Though aggregate dividend payouts increased in 2021, the pandemic created starkly uneven paths across countries and sectors. Compared to their pre-pandemic level, 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,” said Clara Besson, EMEA dividend research lead, IHS Markit. “IHS Markit expects further regional and sectoral disparities due to supply chain disruptions, energy price volatility, inflation and the COVID-19 Omicron variant.”
Each region will see dividend payout growth, though the strength of the expansions will vary. Dividends in the U.S. are expected to increase 5.4 percent this year to 670 billion USD, led by the technology and healthcare sectors. Led by payouts from banks, industrials and health care companies, European aggregate dividends are expected to grow by 5.0 percent to 476 billion USD in 2022. Dividend payout growth will slow in Asia Pacific from the robust 23 percent seen in 2021 to 3.0 percent in 2022 with dividends expected to reach 633 billion USD, an increase of 115 billion USD from pre-COVID-19 levels, led by the banking and industrial goods and services industries.
Travel restrictions will continue to weigh on the travel and leisure sector with payouts expected to remain 18 billion USD below the 2019 level. Similarly, the automobiles and parts sector is struggling to recover as supply chain shortages and raw material price hikes compress profitability; overall, the sector will stay 5.3 percent under its 2019 level with 8 billion USD expected to be paid in 2022. Industrials, the third largest dividend contributor, is projected to rebound with an additional 15 billion USD increase in 2022. Healthcare and technology companies will continue to see dividend growth with payouts reaching 144 billion USD and 3 billion USD, respectively. The basic resources sector, the sector recording the largest aggregate dividend increase in 2021, will see payouts decrease by 9 billion USD to 123 billion USD this year.
The report also reveals:
Dividend growth in emerging markets is expected to outperform developed ones, increasing 23 percent in 2022.
Banks, the top dividend payer among sectors, will distribute more than 283 billion USD in payouts, with the expectation that banks will prefer buybacks over dividends payouts this year.
The oil and gas sector will continue to recover with payouts expected to reach 274 billion USD in 2022, up from 225 billion USD in 2021.
The IHS Markit 2022 Dividend Forecast draws on a bottom-up analysis of more than 12,500 companies worldwide.
About IHS Markit (www.ihsmarkit.com)
IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.
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