Record global dividends in 2024 as Meta, Alphabet and Alibaba join the party

Good news for income investors as global dividends once again reached a record high in 2024. According to the latest Janus Henderson Global Dividend Index, global dividends rose by 6.6% on an underlying basis to a total of $1.75trn*.

More than a third (17 out of 49) countries saw record dividends – including major players like the US, Canada, France, Japan and China. The report says headline growth of 5.2% reflected lower one-off special dividends (which fell from $67.8bn in 2023 to $57.4bn in 2024) and the stronger US dollar.

A strong contributor to the record figures was the first dividend payments made by a trio of global tech behemoths in the shape of Meta, Alphabet and Alibaba. The groups accounted for roughly one fifth of global dividend growth in 2024.

Over the past year, some 88% of companies globally either held or raised their dividend levels, contributing to the 6.6% rise on an underlying basis.

As with 2023, banks made the largest contribution to global dividends, with their dividends rising 12.5% on an underlying basis. The wider financials sector (which includes banks) accounted for half of all global dividend growth in 2024. However, growth was widespread with telecoms, construction, insurance, consumer durables and the leisure sectors all recording double-digit increases. By contrast, the mining and transport sectors were the weakest duo, having paid out $26bn less year-on-year.

Dividends growth set to slow in 2025

According to the latest index – which analyses dividends paid by the 1,200 largest firms across the globe – the outlook for 2025 is less promising, with 5% growth at a headline level for 2025, and 5.1% on an underlying basis. This would bring total pay-outs to $1.83trn which, despite being another record, would see a slowdown in growth year-on-year.

The regional perspective

Miners undermine UK growth

In contrast to many other countries UK dividends actually contracted by 0.6% on an underlying basis. This was principally down to cuts in the mining sector, with roughly 85% of UK companies actually holding or increasing their dividends. HSBC, Shell and GSK (healthcare) were among the biggest contributors.

Elite Rated UK equity income funds include Janus Henderson’s own Responsible Income fund, which has a mid-cap bias and does not have the exposure to miners that many of its peers have. Another alternative is the IFSL Marlborough Multi-Cap Income fund, which invests in 40-70 companies and targets firms which are leaders in their sector and that can grow, regardless of the prevailing economic landscape.

Banks bolster Europe

European dividends rose to 5.6% on an underlying basis in 2024, although the headline growth rate stood at 2.4% due to fewer special dividends being paid out. Two thirds of dividend growth came from the banking sector, which has been bolstered by rising interest rates. Almost 9 in 10 (88%) of European companies raised or held their dividends last year. Elite Rated funds worth considering include BlackRock Continental European Income and Montanaro European Income.

Tech continues to drive US dividend growth

The US recorded underlying growth of 8.7% which was heavily driven by the first dividend payments from both Alphabet (Google) and Meta (Facebook). The pair contributed to a quarter of all US dividend growth (as well as boosting global dividend growth 0.9% in 2024). It is important to note that although these tech firms have dominated the headlines, growth was strong across the board – with 93% of companies raising or holding their dividends in 2024.

In addition to the JPM US Equity Income fund, a number of global equity income funds have significant exposure to US dividend payers. These include the likes of Fidelity Global Dividend (28%) and Guinness Global Equity Income (59%)**.

Toyota and Honda ensure Japanese dividends motor along

Japanese dividend growth pay outs rose by 15.5% on an underlying basis, reaching a new record of $86bn. Toyota Motor and Honda made the largest contribution to growth, although 94% of companies in the region either held or raised their dividends. Baillie Gifford Japanese Income Growth is the only Elite Rated fund in this sector.

Dispersion of returns rife as Asia Pacific dividends fall

Asia Pacific ex Japan was once again the weakest region in 2024. Pay-outs fell 2% on an underlying basis and 4.2% in headline terms, courtesy of lower special dividends and weak exchange rates. However, returns varied markedly across the region, with Singapore the strongest and Taiwan the weakest. Elite Rated funds with excellent long-term performance in this region include the likes of Schroder Asian Income and the Jupiter Income fund.

China drives emerging markets income

Emerging markets saw pay outs rise by 9% on an underlying basis, with two-thirds of the growth coming from China (where dividends reached a record $62.7bn in 2024). Alibaba’s first year of dividend payments saw it distribute $5.1bn in 2024 immediately becoming China’s third largest payer. India’s pay outs also rose 16.4%, while by contrast the likes of Brazil saw dividends fall 9%. The Murray International Trust has typically had a strong allocation to emerging markets, including an 8% holding in Latin American equities**. 

What is the difference between headline and underlying growth?

Headline figures are simply the total amount paid by companies in the index. The underlying growth rate adjusts the headline figure to take account of the impact of exchange rates, volatile one-off special dividends and technical factors related to dividend calendars and changes to the index.

Why are dividends so important for investors?

The importance of dividends can work in two ways. In the short term it can be used to pay for monthly bills amid the increasing pressures of the cost of living crisis – with inflation still above the 2% target in the UK for example.

Longer term, the role of compounding interest is possibly the most important concept people can learn about when it comes to their finances. Investments that generate an income can work even harder for you. By using the income to buy more shares, bonds or units, your pot grows bigger, and you earn interest on that interest again.

For example, take an investment of £1,000 in the FTSE All Share between 1 January 2012 and 28 September 2022. Based on share price changes alone, that £1,000 investment would have produced a notional return of £1,337 before fees. When dividends are included, the return rises to £1,969 before fees – an increase of 47%***.

*Source: Janus Henderson Global Dividend Index, March 2025

**Source: Provider factsheet at 28 February 2025

***Source: Brewin Dolphin, October 2022