2020 has not been an easy season for investors. Not only due to the constant ups and downs of the stock markets triggered by the daily news on the coronavirus pandemic, but also because the dividend season has been irreparably compromised by an exceptional event that has already begun to show its effects on the global economy and finance .
According to the latest edition of theJanus Henderson Global Dividend Index elaborated by the British investment firm, Janus Henderson, "2020 will be the worst year for dividends since the global financial crisis" due to the flurry of cancellations and postponements that the pandemic has caused on almost all the world's squares. But, even if in very small percentages compared to past years, some coupons could still arrive in the coming months.
2020 DIVIDENDS ABOVE 1 TRILLION: THE 2 SCENARIOS
“Despite the cuts we have seen so far – said Janus Henderson investment director Jane Shoemake – we still believe that global dividends will amount to more than $1 trillion, both this year and next”.
The group has imagined two different scenarios for 2020. In the best scenario, dividends on last year's profits will drop by -19%, reaching $1,18 trillion at the end of the year. In the worst case scenario, the coupons will face a decrease of -25%, stopping at 1,1 trillion dollars. A blow, in both cases, not easy to digest for shareholders who in February are preparing to receive their share of corporate profits and who are instead forced to face a cut of a fifth in the payment of coupons.
DIVIDENDS 2020: THE NIGHTMARE SECOND QUARTER
According to the index compiled by Janus Henderson, in the second quarter of 2020 the crisis caused by the Covid-19 pandemic caused $108,1 billion in coupons to evaporate, with 27% of companies deciding to cut or cancel dividends .
In the three months, dividends amounted to 382,2 billion, with an overall drop of 22%. This is the worst quarterly contraction on record since 2009.
Geographically, North America, led by Canada, countered the generalized cuts, where dividends rose by 4,1%, offsetting the 0,1% reduction suffered by the USA.
The crisis has instead hit the European Union hard, where coupons have dropped from 150 billion in 2019 to 83 billion in 2020, also weighed down by the request made by the ECB to the banks to block the disbursement of dividends for the entire current year in order to conserve liquidity to be "turned over" to the real economy. In the EU, France stands out in the negative, a country in which total distributions have fallen to the lowest level in the last 10 years. The UK fares even worse, with UK payouts plummeting by 54%. On the other side, no repercussions for Switzerland, where dividends have remained unchanged compared to last year.
