Global dividends to rise, led by banks: S&P

The outlook for global dividends remains solid, finds S&P Global Market Intelligence in a new report.

Total global dividend payments are projected to rise by 0.7% this year to US$2.2 trillion, with regular dividends maintaining their 4% growth rate and variable dividends expected to drop by 50%.

Powered by the prolonged high interest rate environment, banks will continue to be the primary driver of global dividends, S&P said.

In Canada, regular dividends are forecast to grow by 6% this year, led by the banks and the energy sector, which together account for more than half of Canadian dividends.

The banking sector, which contributes 30% of total dividends, is forecast to grow payouts by 5% year over year, the report said — with energy sector dividends projected to rise by 8% this year.

“Unlike the U.S. market, where numerous energy companies adopted a variable dividend policy, few have done so in Canada,” the report noted. “Accounting for variable dividends growth can drop below 6% compared with 2023.”

Among the remaining Canadian sectors, the retail sector is set to deliver 10% dividend growth in 2024, with basic resources and utilities predicted to grow by 4% and 7%, respectively.

Globally, developed market dividends are expected to be healthier than emerging markets, S&P noted. It predicted that North American dividends will grow by 6% this year, with European payouts rising 4% and developed Asian markets delivering 2% growth.

In developing Asian markets, aggregate dividend payouts are projected to decline by 4%, led by weakness in China and India, following strong growth over the past few years.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.