Corporate America is making waves by showering investors with record-breaking dividends, echoing the famous “Jerry Maguire” line: “Show me the money.” U.S. companies paid out a staggering $164.3 billion in dividends in the first quarter of the year, setting a new high and representing a 7% increase from the previous year. This data comes from the latest Janus Henderson Global Dividend Index released on Thursday.
Tech Titans and Blue Chips Lead the Way
Leading the charge in dividend payments are tech giants and blue-chip companies flush with cash. Microsoft and Apple are prominent among these top dividend payers, along with other Dow Jones Industrial Average heavyweights like JPMorgan Chase, Chevron, Johnson & Johnson, and Verizon. Costco Wholesale also made headlines with a one-time special dividend of $15 per share, amounting to about $6.7 billion in January, in addition to its regular payouts.
Amber Milam, a client portfolio manager at Janus Henderson, commented on the resilience of U.S. dividend growth. She noted that companies are adeptly balancing capital expenditures, financing needs, and shareholder returns through dividends and buybacks, even in a high-interest-rate environment.
New Entrants and Resurgent Payers
Several new names joined the dividend club this quarter, including some returning after a hiatus. Walt Disney, which suspended its dividend in 2020 to conserve cash during the height of the COVID-19 pandemic, reinstated its semiannual dividend in December. Disney paid out 30 cents per share to shareholders in January.
Meta Platforms, the parent company of Facebook and Instagram, and T-Mobile, a wireless telecom giant, also initiated their first-ever shareholder payouts over the past year. Meta’s initial dividend in late March totaled approximately $1.3 billion. T-Mobile’s first dividend, issued in the fourth quarter of 2023, amounted to $747 million, with an additional $769 million paid in the first quarter of this year. T-Mobile aims to boost its payout by around 10% annually, though it still trails behind competitors AT&T and Verizon, which boast dividend yields above 6%.
Global Dividend Landscape
On a global scale, dividends hit a new record of $339.2 billion in the first quarter, up 2.4% from the previous year. European pharmaceutical giants Novartis and Roche were the top global dividend payers during this period, with payouts of $8.6 billion and $7.6 billion, respectively. Microsoft and Apple, which led in dividend payments in 2023, dropped to fourth and eighth places, respectively.
Chinese e-commerce and cloud giant Alibaba Group Holding also made its debut on the Janus Henderson dividend list, ranking 20th with a payout just under $2.6 billion. Like Meta and T-Mobile, Alibaba recently began paying dividends.
The Future of Dividends
Investors can expect the trend of rising dividends to persist. Google parent Alphabet announced a dividend program earlier this year, with its first payout scheduled for June. Dividend stocks are gaining favor on Wall Street, with the SPDR S&P Dividend and Schwab U.S. Dividend Equity exchange-traded funds both rising 11% over the past six months.
Janus Henderson highlighted that nearly all dividend-paying U.S. companies either raised or maintained their shareholder payouts over the past year, driven by rising corporate profits. The notable exception was the struggling pharmacy chain Walgreens Boots Alliance, which was replaced in the Dow by Amazon.com, a company that does not pay a dividend.
Janus Henderson projects global dividend payments to rise by 5% this year, reaching a record $1.72 trillion. Indeed, investors are likely to continue benefiting from generous corporate payouts, solidifying the notion of “show me the money” in the current economic climate.