PanamaTimes

Thursday, May 23, 2024

Energy bonanza drives shareholder payouts to new record

Energy bonanza drives shareholder payouts to new record

Energy companies reaping record profits from soaring oil and gas prices have helped global dividend payments to shareholders soar above pre-pandemic levels and to a record quarterly high, data showed on Wednesday.

Oil and gas firms, including state-controlled giants in Latin America, accounted for more than two-fifths of the growth in dividend payments in the three months to end-June, according to fund manager Janus Henderson's latest global dividend report.

Banks freed from pandemic-era restrictions on dividends were behind a similar share of the growth in payouts, while consumer firms such as automotive manufacturers also shelled out more.

In total, global dividend payments reached $544.8 billion in the second quarter, Janus Henderson calculated, up 11.3% on a headline basis year-on-year after companies slashed dividends during the COVID-19 pandemic.

The payouts highlight how stellar a year companies enjoyed in 2021 as economies recovered, and how well corporate profitability has held up this year even as households are plunged into a cost-of-living crisis as inflation soars and fears of a global recession mount.

For the year, Janus Henderson forecasts global dividend payments will reach a record $1.56 trillion, a 5.8% increase year-on-year.

"What we've seen is companies have generally come back to paying dividends much more quickly perhaps than some commentators thought they would, because earnings have been better," said Ben Lofthouse, Janus Henderson's head of global equity income.

The jump in dividends is good news for shareholders such as pension funds, he added, especially in light of the plunge in markets this year.

While the post-pandemic rebound in dividends has been faster than expected, the outlook is not as rosy as economies slow and corporate margins are slashed.


EMERGING MARKET BOOM


Cash-rich oil producers, notably Brazil's Petrobras and Colombia's Ecopetrol, fuelled the jump in shareholder payouts.

State-controlled Petrobras (PETR4.SA) topped the list of the world's biggest dividend payers in the quarter.

UK dividends leapt 29.3% year-on-year in the second quarter as payouts from commodity producers and banks surged, while high commodity prices drove emerging markets dividends 22.5% higher to a new record. Emerging markets beat all other regions for the first time since 2015.

Despite energy companies reporting soaring profits, their dividend payouts have been higher in previous commodity booms, and the Janus Henderson data does not capture money handed to shareholders through stock buybacks.

With major economies now heading for significant slowdowns, there are concerns about investors' reliance on energy industries for dividend growth.

Dan Kemp, global chief investment officer at Morningstar's Investment Management group, said dividend funds could become "more and more dependent on what is essentially a very cyclical industry."

The scale of recent dividend payouts could also trigger more calls for windfall taxes on oil and gas profits, although analysts say that bigger dividend payments are a boost to the many pension funds that own energy shares.

"We would say that companies paying out dividends to shareholders is preferable from an environmental sustainability view than reinvesting into new oil and gas production that contributes to yet further global warming," said Mike Coffin at Carbon Tracker, a financial think-tank.

Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
El Salvador's Bitcoin Holdings Reach $350 Million
Teens Forming Friendships with AI Chatbots
WhatsApp Rolls Out Major Redesign
Neuralink's First Brain Implant Experiences Issue
Apple Unveils New iPad Pro with M4 Chip, Misleading AI Claims
OpenAI to Announce Google Search Competitor
Apple Apologizes for Controversial iPad Pro Ad Featuring Instrument Destruction
German politician of the AFD party, Marie-Thérèse Kaiser was just convicted & fined $6,000+
Changpeng Zhao Sentenced to Four Months in Jail
Biden Administration to Relax Marijuana Regulations
101-Year-Old Woman Mistaken for a Baby by American Airlines: Comical Mix-Up during Flight Check-in
King Charles and Camilla enjoying the Inuit voice singing performance in Canada.
New Study: Vaping May Lower Fertility in Women Trying to Get Pregnant
U.S. DOJ Seeks Three-Year Sentence for Binance Founder Changpeng Zhao
Headlines - Thursday, 23 April 2024
Illinois Woman Wins $45M Lawsuit Against Johnson & Johnson and Kenvue for Mesothelioma Linked to Baby Powder
Panama's lates news for Friday, April 19
Creative menu of a Pizza restaurant..
You can be a very successful player, but a player with character is another level!
Experience the Future of Dining: My Visit to an AI-Powered Burger Joint
Stabbing rampage terror attack in Sydney, at least four people killed, early reports that a baby was among those stabbed.
Iran fired more than 300 drones and missiles at Israel overnight. Israel Reports Light Damage After Iran Launches Large Strike.
I will never get enough of his videos and the pure joy and beauty of these women!!
Scientists at the University of Maryland have developed an "invisibility cloak", for AI using adversarial patterns on a sweater, making the wearer nearly undetectable to standard object detection methods.
Lamborghini Bids Farewell to Its Best-Selling Sports Car: The Huracán
Sam Bankman-Fried Appeals 25-Year Prison Sentence for $8bn FTX Fraud
OJ Simpson, ex-NFL star who was acquitted of murder, dies aged 76
British Backpacker Imprisoned in Notorious Bolivian Prison: Family Raises Funds for Legal Fight and Essentials
Argentina: Venezuela Cuts Power to Embassy after Opposition Meeting
El Salvador Offers 5,000 Passports to Skilled Foreign Workers: Tax-Free Relocation and Citizenship
Panama Papers Trial Begins: Founders of Mossack Fonseca Face Money-Laundering Charges
75 Becomes the New 65: Retiring in Your 60s Unrealistic as Life Expectancy Increases and Costs Rise
Total Solar Eclipse of 2021: 32 Million Witness the Mystical, $1.5bn Spectacle Sweep Across North America
New shopping experience…
New world, new reality, let’s get used to it
UK Company Passes Milestone in Developing Space-Based Solar Power, Aiming to Power a Million Homes and Provide Constant Energy
Mexico Breaks Diplomatic Ties with Ecuador after Police Storm Embassy, Arrest Former Vice President
Monty Python were so ahead of their time
If there's a will, there's a way!
Rules about how to dress are important, but not so much if you have a lot of money.
Body Armor Firm Showcases Stab-Proof Vest in Demo on CEO
Mexico Cuts Diplomatic Ties with Ecuador After Embassy Stormed in Quito
Here is a tattoo idea, for engineers
Zoraya Ter Beek, a 28-year-old woman from the Netherlands, will undergo euthanasia in May due to severe mental health challenges
Here's a video featuring Fidel Castro, where he discusses his stance against war and his commitment to preserving life, positions that have put him at odds with the USA:
Woman reaches behind and steals gun from a security guard and shoots three people while getting detained in Chile
Take a walk around the safe and thriving downtown San Salvador.
Joe Biden criticised by Trump campaign for declaring Transgender Day of Visibility on Easter Sunday
Macron says France will help Brazil develop nuclear-powered submarines
A video demonstrating women's self defense class in 1930
×