Despite all the hand-wringing over the health of the global economy right now — whether over Brexit; a long trade war between the US and China; the possibility of a eurozone recession; slowing Chinese economic growth… — statistics show that there’s never been a better time to be a dividend investor than right now.
And boy, did the latest projections from asset manager Janus Henderson fling the door open on just how ripe the investing environment is.
According to its Global Dividend Index report unpacked today, global dividends are set to rise 5.1% on an underlying basis in 2019, provided that the US dollar remains at its current exchange rate against other major currencies.
This means that total shareholder payouts will reach an all-time high of $1.414trn this year, up from $1.37trn in 2018 and more than double the $700bn forked out just a decade ago.
A bright outlook
Janus’s forecasts did suggest a slowing in the annual dividend growth rate, though, from the 8.5% on an underlying basis in 2018, to reflect the more challenging outlook for companies this year. It said that “we expect dividend growth to be more in line with the longer-run trend” due to the fact that “corporate profit expectations have fallen as global economic forecasts have been revised down.”
That said, the financial giant noted that “most observers still expect companies to deliver positive earnings growth in 2019,” while adding that “dividends in any case are much less volatile than earnings, so we remain optimistic on the prospects for income investors.” Besides, predicted annual dividend growth closer to the long-term trend of between 5% and 7% certainly isn’t to be sniffed at, certainly not in my opinion.
UK stocks remain the biggest payers!
Looking back at last year’s numbers, in the UK total dividends rose 8.8% on an underlying basis to $99.5bn, Janus said. The biggest-paying stock on the global stage remained Royal Dutch Shell, it said, which took top spot for the third year on the spin. Two other London-listed stocks were featured on the list of the world’s best 20 dividend payers: HSBC and BP, which retained their places at 7 and 14, respectively.
A quick look at just the FTSE 100 reveals just how lucrative the stock market remains for income chasers. And there’s a broad range of great stocks to pick from. The ever-reliable housebuilder Taylor Wimpey carries a gigantic forward dividend yield of 11%, but if that’s not to your liking, pharmaceuticals giant GlaxoSmithKline sports a 5.1% yield.
Or how about power play National Grid and its 5.6% prospective yield, or insurance giant Aviva’s stunning 8% yield? These are just a handful of the blue-chips that I reckon could make you a fortune in 2019 (and beyond, too). But there’s plenty of others that could help you get rich. As I said, there’s never been a better time to go dividend hunting.
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Royston Wild owns shares of Taylor Wimpey. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended HSBC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.