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US dividends up for the fifth time in Q1


US companies paid out a record $99.4bn (£63.3bn) in the first quarter of 2015, up 14.8 per cent year-on-year, the Henderson Global Dividend Index shows.

The rise in dividends marks the fifth consecutive quarter of double digit increases, despite a surge in the US dollar.

North American companies spread their payments more evenly over the year than other regions, says Henderson, with US payouts making up 56 per cent of the global Q1 total.

Global dividends fell 6.3 per cent year-on-year to $218bn for the second consecutive quarter, but underlying growth was up 10.9 per cent year on year.

The first quarter was “a very small one” for Europe, says Henderson.

European dividends fell 2 per cent to $34.3bn, although underlying growth rose 15.2 per cent.

Emerging market dividends rose 13.7 per cent to $15.6bn compared to a drop of 11.7 per cent in March.

Worldwide, financials and consumer industries grew rapidly, while healthcare and utilities performed poorly, with utilities dividends dropping 13.6 per cent year-on-year.

Henderson Global Investors head of global equity income Alex Crooke says the effect of the strong dollar will be “even greater” in the second quarter of 2015, with Europe and Japan paying most of their annual dividends, possibly as much as $40bn.

He says: “Despite our lower forecast, there are many reasons for optimism. Japan, the second largest stock market in the world, is undergoing a cultural shift towards higher dividend payments, unlocking large cash piles from what has traditionally been a low yielding part of the world, while in Europe, though dividend growth is modest, it is tracking somewhat higher than we expected. Meanwhile the US goes from strength to strength, and is likely to break new records this year.”

Crooke also says equity income investing has “a significant role” to play in meeting investors’ income needs.

“Over time, the risks to dividend growth are significantly smaller if you look beyond the confines of your own domestic stock market,” he says.



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