Dividend falls in 2020 will be the worst in a decade

Dividends of the world's largest companies in 2020 could fall by 23%, which will be the largest global drop in payments since at least 2009, according to a new report from British asset management company Janus Henderson. Financial and consumer companies have already suffered the most, representatives of the IT industry and healthcare are still managing to resist the trend.

In the second quarter of this year, global dividend payouts fell $108 billion to $382 billion, Janus Henderson calculated. This equates to a 22% year-on-year decline, the worst since the financial crisis. The main thing from the report of the British company:

• 27% of companies worldwide cut their dividend payouts in the second quarter, cuts affecting all regions except Canada.

• Europe and Great Britain had the hardest time. More than half of European companies have cut dividend payments, and two-thirds of this number have completely abandoned them.

• The amount of dividends paid in Europe fell by 45% in the second quarter, to $77 billion. Half of the fall came from banks and other financial companies that the European Central Bank (ECB) recommended not to pay dividends.

• Due to the fall in oil prices and quarantine measures, the dividend payments of oil companies and industrialists have been hit hard.
• Dividends of companies in the areas of technology and telecommunications, as well as health care, were practically not affected. On average, payments even increased, by 1.8% and 0.1%, respectively.
• As a result, Microsoft and Apple were among the top 10 global dividend payers for the first time in a year. But the rating is still headed by Nestle.

Janus Henderson experts expect global dividend payouts to fall by 17% to $1.18 trillion at best in 2020, and by 23% to $1.10 trillion at worst. The restoration of the volume of payments, in their opinion, will be influenced by the development of the epidemiological situation, the actions of American companies in the fourth quarter, as well as the decision of the ECB on dividends from European banks.