UK dividends lag global growth

Global stocks shrugged off political and economic concerns to set a new dividend record in the first quarter, although UK payouts lagged behind the international average, new research indicates.

UK dividends posted underlying growth of 4.4 per cent in the first three months of 2019, failing to keep pace with a global rise of 7.5 per cent, according to the Janus Henderson Global Dividend Index.

The asset manager pointed to the UK’S “heavy reliance” on slower growth oil and banking stocks.

Record payouts in the US and Canada helped spur global dividends to a new firstquarter high of $263.3 billion (£206bn), with pharmaceutical firms the largest payers.

The Janus index rose to a record 190.1, meaning that dividends are almost twice the level they were when the index started in 2009. The firm maintained its forecast that global payouts will break new ground to hit $1.43 trillion this year, representing headline growth of 4.2 per cent.

Head of global equity income B en Lofthouse said: “We do not yet feel the need to make changes to our dividend forecast for 2019. We have already allowed fora slow down in growth this year, and would highlight that dividends are far less volatile than earnings.

“Investors can look forward to dividend growth of around 4 to 5 percent in 2019 and another record year for dividend payments.”