Receiving dividend payments can be one of the most rewarding aspects of owning shares.
With that in mind, ASX investors may be well-served by looking at certain market sectors that are expected to unleash a total of $1.7 trillion in dividends.
Financial institution Janus Henderson has just released its latest Global Dividend Index, saying strong, broad-based growth drove record dividends in the second quarter of 2024.
According to Janus Henderson, 92% of companies globally raised their dividends or maintained them. Global dividends rose to a record $606.1 billion, up 8.2% on an underlying basis. Headline growth was 5.8%, which was impacted by exchange rates, especially the yen's weakness.
Which sectors are growing their dividends?
There were only two sectors that experienced dividend cuts during the second quarter of 2024.
Basic materials saw an underlying dividend cut of 14.8%, while healthcare and pharmaceuticals experienced a dividend cut of 2.2%.
There were three sectors that saw double-digit dividend growth – communications and media with a 19.6% dividend increase, financials delivered a 14.5% dividend rise and the consumer discretionary dividend grew by 13.5%.
The other global sectors experienced dividend growth of between 4.7% to 8.4%.
After considering the latest economic situation, and how positively economies have generally dealt with the burden of higher interest rates, the financial institution upgraded its view on 2024's dividend haul. Janus Henderson said:
After a strong second quarter, and to allow for the strong contribution dividend newcomers will make this year, we are upgrading our forecast for 2024's dividends. We now expect companies around the world to distribute $1.74 trillion, up 6.4% year-on-year on an underlying basis (up from 5.0% at the time of our last report).
…Inflation has slowed while economic growth has been stronger than anticipated. Companies have also proved resilient and in most industries continue to invest for future growth.
The ASX picture
Janus Henderson noted that Woodside Energy Group Ltd (ASX: WDS) delivered a large dividend cut following lower profits due to lower commodity prices, inflationary pressures and asset impairments.
The financial company also noted that the third quarter marked "Australia's seasonal high and should prove more resilient, though we do not expect strong growth."
According to Commsec, some ASX large-cap shares projected to see dividend growth in the next year or two include National Australia Bank Ltd (ASX: NAB), Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), Transurban Group (ASX: TCL) and Scentre Group.
