Dividend Payouts by Region & Country

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Dividend Payouts by Region & Country

If you want to invest in dividend paying stocks and if you want to do so while having a global/regional diversified portfolio, then it is interesting to break down global dividend payouts by region or even by countries.

Before Covid19 global dividends rose by 3.5% to a total amount of US$ 1.43 trillion in the year 2019. This growth was partially annihilated by the virus, so that the global dividends declined in 2020 by about 12% to US$ 1.255 trillion.

One in eight companies cancelled their dividends in 2020, and one in five did cut them. About two thirds of all companies either increased or paid out the same as in the previous year.

Some companies that did cut or cancel dividends earlier in 2020 made this up by paying special dividends later that year.

The graphics in this post analyze the dividends paid by the top 1,200 companies by market capitalization. The data is provided by Janus Henderson.

Global Distribution

While we all know that the US have a very rich dividend payout history, let us have a look on how the amount is distributed among the different regions.

Dividend distribution by region.

As previously mentioned, North America takes a big chunk (almost 50%), followed by Europe. We can also have a look at the past. Note that the dividends paid in the first quarter of 2020 were not affected much by Covid due to still being ‘unknown’.

Regional distribution of dividends 2016 through 2020.

We can see that the payouts in some regions have not changed by much from 2019. This includes North America, Emerging Markets, and Japan.

Furthermore, the total amount of dividends paid in 2020 lies in between the amounts of 2016 and 2017.

The payouts in China, Hong Kong, Switzerland and Canada performed best. One reason Switzerland might have performed well is that most dividends are paid out early in the year, so that the consequences of the pandemic were not known at that time. Also Japanese payouts were stable.

Dividend Breakdown in Europe

We can break this down further, and have a look at the European market. While this is the slowest growing market in terms of dividends, we can see a couple of countries taking up most of the dividends.

2020 dividend payout distribution in Europe.

Payouts in Spain and France were greatly affected by the Corona virus where 71% of the companies did cut the dividends.

Out of all companies worldwide, the European countries together contributed about half of the cuts.

Historical Evolution

Let’s have a look on how the dividend payouts evolved over time. Here is data reaching back to 2009, split into different regions.

Dividend trend by region. (Index at 100)

Let’s dive into the European market. Having a seemingly stalled dividend growth over the past decade and most European countries having Covid protective measures stronger than anywhere else in the world, the dividend payout decreased to less than the amount from 10 years ago.

As we can see in one of the pie charts above, the top-4 countries paying out most dividends are the UK, Switzerland, Germany and France in that order. The dividend growth of these countries looks like this.

Evolution of dividend payouts of European countries with the highest dividend payouts.

The only country that looks different to the others here is Switzerland. With a steeper incline in the first half of the last decade, the curve flattens a little in the second half. Nonetheless, the dividends more than doubled since 2010.

Please recall, that the absolute numbers paid by the UK are still higher than in Switzerland.

The payouts in the UK (and other countries, e.g. Australia) were affected by state regulations. Banks had instructions to limit the payout ratios. Banks and oil companies contribute large amounts of dividends in the UK for example.

People mainly investing in banks for their high dividends came out short. This is a reason why we should always diversify a portfolio.

Outlook

Jansen Henderson Investors expects global dividends in the first quarter of 2021 to decline. They also suggest that global dividends will increase by about 2-5%, to 1.32 billion USD in the best case, in 2021.

Note that dividends, like in every recession, decrease slower than earnings. This is because they usually mirror the long-term outlook of the companies. This is why profits should be an important factor for investors.

Let’s hope the virus vanishes soon. Let me know if you would like me to analyze any other countries/regions in the comments down below.