Kiosk 360. Dividends distributed to companies around the world fell 12.2% to $ 1.255 billion in 2020. Despite the consequences of the Covid-19 pandemic, most companies have maintained their policy of retaining their shareholders.
Despite a global economy marked by the health crisis which negatively impacted the global economy, companies, although scalded by the crisis, have generally maintained their policy of distributing dividends to their shareholders, even when regulators in certain sectors dissuade them.
Suddenly, despite the decline in the results of companies and many sectors of activity, especially in the sectors most affected, the volume of distribution of dividends at the global level fell only 12.2% to 1.255 billion dollars in 2020, compared to fiscal 2019.
This resilience in dividend distribution is explained by the fact that most companies have maintained or increased their redistribution to shareholders, according to a report released on Monday, February 22 by asset manager Janus Henderson.
Proof of this resilience, dividends paid in 2020 have declined less than during the financial crisis of 2008. “The impact of the pandemic on dividends has followed the trend of a classic recession and its impact has been, on an international scale, less severe than following the 2008 financial crisis ”, underlines the study, cited by capital.fr.
This situation is explained by the fact that, despite the effects of the pandemic and the lack of visibility on future prospects, two thirds of companies in the world have succeeded in increasing or maintaining the level of their distributed dividend. Through these generous policies, companies try as much as possible to retain their shareholders during this period of uncertainty.
However, with some sectors more affected by the crisis than others, one in eight companies did not pay dividends to their shareholders. In some cases, it is the regulators of certain sectors, in particular the banks, who have encouraged this non-distribution of dividends in order to strengthen the financial soundness of these companies.
In addition, dividend distributions differed from one region to another. North American companies were the most generous with dividends which increased by 2.6% to 546 billion dollars in 2020. It should also be noted that American high tech companies have generally benefited from the crisis of the Covid pandemic -19. Microsoft has won the rank of the largest distributor of dividends.
Chinese, Hong Kong and Swiss companies have also been generous. As for European companies, they are responsible for half of the drop in dividends in the world, mainly due to the banking and oil sectors. France was the country that canceled the payment of dividends the most in 2020, mainly because of its banking sector.
Finally, for 2021, asset manager Janus Henderson forecasts an increase in dividend distributions of up to 5% to 1.320 billion dollars.