Towards record dividends for shareholders in 2021

A study released Monday showed that global stock dividends are rebounding faster than expected after the pandemic and are expected to hit a record high in 2021, driven by “heavy” payments made by miners in the third quarter.

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US asset manager Janus Henderson found in a quarterly report that shareholder payments jumped 19.5% from 2020 to $403.5 billion, a record for the third quarter.

These numbers push the company to improve its forecast for 2021: Janus Henderson now projects payment growth of 15.6%, expected to reach $1,460 billion, an all-time high.

“Dividends are recovering faster than expected, reflecting improved corporate balance sheets and increased optimism for the future,” Ben Lofthaus, head of equity management at Janus Henderson, said in the statement.

Thus, in the third quarter, “Janus Henderson’s dividend index is now just 2% below the pre-pandemic peak in the first quarter of 2020,” before an unprecedented decline in shareholder compensation, the study notes.

Mining companies are inflating their third-quarter earnings with a total of $54.1 billion paid out, an “astounding amount” to the study’s authors who stress it’s more than the previous record, which was set in the whole of 2019.

The study states that “rising commodity prices have generated record profits for many mining companies.”

However, regarding the outlook for 2022, “it seems unlikely that miners will be able to sustain this level of payment given their dependence on volatile commodity prices,” warns Jane Shomick, portfolio manager at Janus Henderson.