Energy sector gains push dividend payments to all-time high

Energy companies that have made record profits from soaring oil and gas prices have helped global dividend payments to shareholders to exceed pre-pandemic levels and hit a record quarterly high, data showed on Wednesday.

Oil and gas companies, including state-owned Latin American giants such as Petrobras, accounted for more than two-fifths of the increase in dividend payments in the quarter ended in June, according to Janus Henderson’s latest global dividend report.

Banks, freed from pandemic-era dividend restrictions, were responsible for a similar share of the growth in payments, while consumer companies such as automakers also paid more.

In total, global dividend payouts reached $544.8 billion in the second quarter, Janus Henderson calculated, up 11.3% from a year earlier, after companies slashed dividends during the Covid-19 pandemic. 19.

The payments highlight the stellar year businesses enjoyed in 2021 as economies recovered, and how corporate profitability held up this year even as families plunged into a cost-of-living crisis with soaring inflation and heightened fears. of a global recession.

For the year, Janus Henderson predicts global dividend payments will hit a record $1.56 trillion, up 5.8% from a year ago.

Emerging markets boom

Cash-rich oil producers, notably Brazil’s Petrobras and Colombia’s Ecopetrol, boosted the jump in shareholder payments.

Petrobras topped the list of the world’s largest dividend payers in the quarter.

UK dividends rose 29.3% year-on-year in the second quarter as payments from commodity producers and banks soared, while high commodity prices lifted emerging market dividends 22.5% to a new record. Emerging markets outperformed all other regions for the first time since 2015.

Despite energy companies reporting rising profits, their dividend payouts were higher in previous commodity booms. Janus Henderson’s data does not capture cash delivered to shareholders through share buybacks.