Australian dividends surge to a record high in 2022: Will they be higher in 2023?

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Dividends in Australia reached $97.7 billion, but here is why the growth in dividends will fall.

In the last year, dividend investors in Australia have cashed in.

Fresh figures released by Janus Henderson show that Australians actually received a record dividend payment of $A97.7 billion.

But there’s a caveat to the why.

While we saw strong growth in dividends, it was actually our strengthening dollar that saw us set a record in US dollar terms. Otherwise 2021 was a better year for dividends investors.

Regardless though, Australian dividend investors are still beholden to banks and rocks.

“Australia’s very large banks grew their payouts 5.9%. Between them banks and mining companies accounted for more than three quarters of dividends paid in Australia last year,” the report says.

Global markets shake off economic headwinds

Australia’s strong results were not in isolation.

According to the study, global dividends as a whole had a 13.9% underlying growth.

This led to a record $USD1.56 trillion being paid out across the world.

Janus Henderson’s client portfolio manager Jane Shoemake highlights that globally dividends are back above pre pandemic levels.

“Despite rampant inflation, interest-rate hikes, war and asset price declines in 2022, global dividends continued to grow highlighting their importance to investors all round the world,” she says.

12 countries saw record dividends

All in all, 12 countries returned record payment in their own dollar terms to their shareholders.

These included the US, Canada, Brazil, China, India and Taiwan, who had a record in US dollar amounts.

Our markets, along with France, Germany and Japan saw a record in local currency.

“From a geographical perspective, emerging markets, Asia-Pacific ex Japan and Europe all saw dividends rise by around a fifth on an underlying basis,” the report continues.

Will 2023 be another strong year for dividend payments?

Janus Henderson points out that growth payout actually slowed throughout 2022, which they expect to continue into 2023.

But while underlying growth cooled from 10.4% in the first quarter to 5.5% by the fourth.

Overall though dividends are likely to increase.

“For 2023, we expect dividend growth to slow to 2.3% on a headline basis, equivalent to an underlying increase of 3.4%, taking the global total to $1.60 trillion,” the report concludes.

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