Seven key dividend forecasts for 2024*

S&P Global Market Intelligence Dividend Forecasting projects 2024 global aggregate dividend (i.e., dividends with payment dates falling in calendar year 2024) to stay largely flat at US$2.2 trillion, up only 0.7% year over year. Regular dividends will maintain 4% growth, while special/variable dividends will be halved.

1. US

The largest annual add-on will come from the US for the third consecutive year. The optimism in the world's largest dividend-paying market stands out, widening the gap from the rest. About US$28 billion more will be paid in 2024 with all 20 sectors expected to grow regular base dividends on the average of 6%. The growth is driven, in part, by the companies that reinstated dividends in 2023 after the pandemic-induced cuts, with a few more expected to do so in 2024.

2. Europe

While the absence of special dividends from the German automobile industry will downplay the aggregate dividend growth to 0.9%, we project regular dividends to register growth of 4% (or 5.6% measured in euro) in 2024. A clear contrast in growth trajectories is anticipated. Italy and Spain, where the largest contributing sector is banks, are projected to register 19% and 10% regular dividend increases, respectively. On the other hand, Germany's regular dividend will be lackluster given its large exposure to industrials and the limited lift from banks. Consumer products and aerospace and defense will support France to maintain 10% year-over-year regular payout growth for consecutive years. In the UK, the upward momentum from banks will be offset by financial services payout, bringing the average regular dividend growth to 5%.

3. Developed Asia-Pacific

The developed markets in Asia-Pacific are set to register average aggregate growth of 2% in 2024. Hong Kong SAR will see a strengthening momentum, especially in retail and travel and leisure with the travel resumption and improving economic outlook. Japanese and South Korean automobile players are set to boost payouts thanks to robust electric vehicle (EV) sales. On the other hand, softening bank payout in Singapore and a highly expected cut from Australian mining players will leave the dividend scene of both markets quiet.

4. Developing Asia-Pacific

The aggregate dividend from developing Asia-Pacific will reduce by 4% in 2024. The outlook for the major developing markets is relatively downbeat compared with the rest of the world. Dividend growth will soften in mainland China and India to flat or contraction from the robust double digits recorded in recent years. Taiwan's dividend will shrink by more than 20% for the second consecutive year due to sluggish exports. Support from the domestic economy is the key factor shaping the outlook for three Southeast Asian markets — industrials for domestic investment, banks, telecom and consumer goods will increase payouts, whereas basic resources will show a sharp fall. 2024 payouts will rise 15% in Thailand, increase 5% in Malaysia and drop 7% in Indonesia.

5. Banks

Banks will continue to be the anchor of the global dividend, accounting for 16% of the aggregate payout. We project the total payout to amount to US$345 billion, up 8% year over year. Almost all markets will see bank dividends growing in the prolonged high-interest environment. European banks are noteworthy — Italian banks are set to distribute one of the largest increases even after the windfall tax in the summer of 2023. Similarly, Spanish banks are forecast to pay 22% more dividends in 2024. Bank dividends in Hong Kong will rise more than that of mainland China against the backdrop of the inverse interest rate trends between mainland China and Hong Kong. The uncertainty on the timing of interest rate cuts is a shared downside factor for all banks, except mainland China.

6. Oil and gas

Our forecast for oil and gas has been revised down since the update in October 2023**. The latest projection shows that the payout from global oil and gas players will shrink by 3.4% in 2024. Companies are anticipated to continue to prioritize a combination of regular dividends and buybacks as their primary shareholder return options. Regular dividends are expected to inch up by 3%, while special dividends and conditional returns will be halved since the peak payout of US$48.8 billion in 2022. Out of more than 200 oil and gas companies under our coverage, we expect about 140 names to see an increase in forward dividend per share (DPS).

7. Industrial goods and services

The aggregate dividend from industrial goods and services will decline the most, by US$27.4 billion or down 12% year over year, reflecting the depressed sector sentiment globally. Heavy cuts in regular dividends are coming from the shipping players in Germany, Denmark, Taiwan, Japan and Hong Kong as freight prices soften from the COVID-19 peak.

* All data updated as of Jan. 7, 2024. "Aggregate dividends" refer to regular plus special/variable payout unless specified. All growth figures are computed based on dividends measured in US dollar to reflect the foreign exchange impact unless specified. Please refer to the respective market highlights for the year-over-year change free from the foreign exchange impact (i.e., measured in local currencies).

** See Market Intelligence's Global Oil & Gas winners through the lens of dividends (Nov. 8, 2023): https://cdn.ihsmarkit.com/www/pdf/1123/Global-oil-gas-report-final-for-media.pdf

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.