A new report from business information provider HIS Markit claims that in 2018, there would be a 10 per cent increase in the amount of dividend that is to be declared. The report predicts that the total dividends would reach an approximate value of $1.65 trillion and which would be the highest level of annual growth since 2014.
“Our positive global forecast is based on a bottom-up analysis of more than 7,500 companies, which collectively show an encouraging economic outlook,” said Thomas Matheson, head of dividend research at IHS Markit. “In 2018, we expect to see stronger performance across sectors, coupled with resurgent growth in Europe and a notable decrease in dividend cuts.”
Compared to 2017, the global banking sector would be the one that is anticipated to present the largest growth in the payouts for this year and would touch $12.6 billion, according to the IHS Markit Dividend Forecasting report. The second most lucrative sector would be the technology sector with expected payout of $12.6 billion according to the report.
The highest percentage growth in dividend growth would be 16 per cent from the basic resources segment while the construction and materials segment would record a growth of 14 per cent while technology segment would register a 13 per cent growth.
In dividend growth, the developed markets would be outperformed by the emerging markets in 2018, according to the report. The emerging markets of the Americas is expected to note a payout growth of 17 per cent while those from Asia is anticipated to note a growth of 12 per cent. The EMEA countries is also expected to register growth of 12 per cent. Among the developed markets, 15 per cent growth is expected to be noted by the Eurozone followed by APAC with 10 per cent growth.
The report also states that the largest overall contribution of $258 billion to the aggregate global dividends would be made by the baking sector. There is an expected growth in dividends of 10 per cent in the UK despite Brexit. The report also predicts that the dividend growth in the U.S. in 2018 would be slightly below the 2017 benchmark as the growth is expected to be 8 per cent. However, stock specific factors would result in some dividend cuts which would be varied across regions even though the cuts would be minimal.
IHS Markit provides market research reports to over 50,000 customers including some government sectors and about 85 per cent of the Fortune Global 500 companies and the world’s leading financial institutions.
(Adapted from PRNewswire.com)