The Global Dividend Index from Janus Henderson always commands plenty of attention from the financial press. The latest edition, released yesterday, provided us stock hunters plenty to sink our teeth into.
It predicts dividend growth will slow in 2020. It also suggests, though, that total payouts from UK companies will hit fresh record highs. There were some interesting snippets buried further down in the report that share investors will want to know too.
According to Janus Henderson, underlying dividends rose fastest annually in the oil, gas and energy sector in 2019 (on a global basis) than in any other. Shareholder payouts increased by around 10%, it said, driven by emerging markets and North America.
Before you go splashing the cash on oil stocks though, bear in mind that last year such companies accounted for just 11% of total dividends worldwide in 2019. If you’re looking for the most lucrative sector for these shareholder rewards you might want to have a gander at the financial sector instead. Payouts here grew around 6% last year.
This particular industry accounted for a whopping 27% of all global dividends last year, says Janus Henderson. It’s a figure which leaves the oil, gas and energy specialists a long way back in second place.
That’s not to say I’d advocate you opening your chequebook and ‘going scattergun’ though. Like the oil sector, where earnings are coming under increased pressure from rising supply and faltering demand, some of Britain’s biggest banks are sitting under an increasingly dark cloud as well.
Future profits for the likes of Lloyds, Barclays and RBS (which is soon to be rechristened Natwest Group) are under threat from a possible hard Brexit later in 2020. This could cause huge repercussions well into the new decade for their bottom lines and their ability to keep paying big dividends, naturally.
There are a few big-yielding banks I would be happy to load up right now though. Take Bank of Georgia (LSE: BGEO) as an example. This is a share whose mammoth 5.2% yield for 2020 should make income investors sit up and take serious notice. Its forward P/E ratio of 6 times makes it one of the London stock market’s cheapest banks to buy too.
I’ve long advocated Bank of Georgia as a splendid stock for long-term investors to entertain. It gives individuals an opportunity to latch onto the Eurasian country’s booming economy. They can ride the low banking product penetration that exists in Georgia with this stock too.
Full-year results unpacked last week underlined the bank’s compelling investment case. In them, Bank of Georgia advised that profit before tax and one-off costs rocketed 22% in 2019, to 572.8m Georgian lari. In the period, operating income rose 8% year on year to 1.1bn lari because of another strong showing from its retail division. Its loan book here ballooned 19% on an annual basis, thanks to solid mortgage business and strong lending to small- and micro-sized businesses.
City analysts are expecting more profits and dividend growth in 2020. And I expect the Georgian bank to continue making progress on both of these fronts well into the 2020s as the national economy swells and swells.
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.