Biggest dividend payers worldwide: These are the expected dividend yields for 2023

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• According to the Janus Henderson Global Dividend Index, strong dividend growth in 2022
• Dividend growth expected to slow in 2023
• “Handelsblatt” calculates the expected dividend yield for 2023 for the world’s largest dividend payers

With the Janus Henderson Global Dividend Index (JHGDI), the investment company Janus Henderson regularly publishes the latest study results on global dividend trends. According to the latest March 2023 edition of the JHGDI, global dividends rose 8.4 percent to $1.56 trillion in 2022, as a whopping 88 percent of companies around the world increased or kept their dividends stable. Overall, global dividend growth was so strong in 2022 that 12 countries reported record payouts in US dollars.

The growth in global dividends was mainly driven by oil and gas companies, which according to Janus Henderson increased their payouts by two-thirds in 2022 due to the rise in energy prices. According to the investment company, they alone were responsible for a quarter of the global increase in dividends. In Europe, on the other hand, according to the long-term study, dividend growth was “considerably boosted by automobile and luxury goods manufacturers as well as financial companies and shipping”. Dividends in Denmark and Germany recorded the fastest growth across Europe. “German companies contributed disproportionately to dividend growth in Europe in 2022 with an increase of 33.5 percent on an adjusted basis,” the report continues.

Those were the biggest dividend payers in the world in 2022

From a global perspective, however, no German companies were able to place themselves in the list of the largest dividend payers that Janus Henderson determined based on the total amount distributed. The raw materials group BHP Billiton came in first there for 2022 with distributions totaling 23.5 billion US dollars. Oil company Petrobras secured second place with USD 21.8 billion, third place went to software giant Microsoft with distributions of USD 19.0 billion. The ten largest dividend payers in the world in 2022 according to the Janus Henderson Global Dividend Index also included ExxonMobil, Apple, China Construction Bank, Rio Tinto, China Mobile, JPMorgan Chase and Johnson & Johnson. Overall, these corporations distributed $155.1 billion to their shareholders last year. This corresponds to almost ten percent of the dividends paid out worldwide in 2022.

Chevron, CNOOC, Verizon, TotalEnergies, AbbVie, AT&T, TSMC, PetroChina, Pfizer and Procter & Gamble also ranked eleventh to 20th in the current JHGDI.

Dividends are likely to increase slightly in 2023 as well

For 2023, Janus Henderson also expects dividend growth to slow as economic growth slows, as lower demand and higher loan servicing costs are likely to weigh on companies’ cash flows and thus limit the scope for dividend increases. Also, it is “unlikely that energy dividends will repeat the sharp rise seen in 2022,” wrote Jane Shoemake, client portfolio manager at Janus Henderson. “For 2023, we expect dividend growth to slow to 2.3 percent, an adjusted increase of 3.4 percent, taking the total to $1.60 trillion,” the report continued. This still results in slight growth.

Dividend yield forecast for top companies in 2023

However, since the total amount distributed as dividends by a company is not very meaningful from an investment perspective, the “Handelsblatt” took a closer look at the 20 largest dividend payers in the world determined in the Janus Henderson Global Dividend Index and calculated the expected dividend yield for 2023. Dividend yield is a stock-assessment metric that compares a company’s dividend payout to its share price. In its calculation, the “Handelsblatt” comes up with dividend yields of up to 52 percent for the groups considered for 2023. But far from all major dividend payers have such high values.

For example, the magazine expects Microsoft, the third-largest dividend payer in 2022, to only have a dividend yield of 1.0 percent in 2023. This puts the tech giant far behind in the ranking of the highest expected dividend yields – only Apple’s expected dividend yield in 2023 is even lower at 0.7 percent. According to JHGDI, BHP, the largest dividend payer, is only in the upper middle of the list with an expected dividend yield of 6.3 percent in 2023.

According to the “Handelsblatt”, however, number two on the Janus Henderson list should deliver a whopping dividend yield of 52.2 percent in 2023: Petrobras. According to the magazine, CNOOC – number twelve in the JHGDI – should also be in double digits for 2023 at 13.7 percent. For PetroChina, China Mobile, China Construction Bank and Verizon, the expected dividend yield in 2023 is between 9.5 and 6.7 percent and is therefore still quite high. Rio Tinto (6.3 percent), AT&T (5.8 percent), TotalEnergies (5.3 percent), AbbVie (3.9 percent) and Pfizer (3.9 percent) are in the middle of the “Handelsblatt” list.

The lowest dividend yields in 2023 – along with Microsoft and Apple – are likely to be Chevron (3.7 percent), ExxonMobil (3.3 percent), JPMorgan Chase (3.0 percent), Johnson & Johnson (3.0 percent), Procter & Gamble ( 2.6 percent) and TSMC (2.4 percent).

While a high dividend yield is desirable for investors, a very high dividend yield can also be a red flag. Because the key figure is linked to the share price, it automatically increases if the price falls, which can give a false picture of the actual economic situation of a company. A careful individual examination is therefore particularly useful in the case of extreme values ​​for the dividend yield.

Editorial office finanzen.net

This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.

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