Global dividends will reach $1.52trn in 2022, up from the previous record of $1.47trn last year, according to Janus Henderson's new forecasts.
2021 saw global dividends strongly recover, surging 14.7% from 2020. However, the latest Janus Henderson Global Dividend Index predicts that payouts will rise even higher.
The report found that a quarter of the steep increase in dividends in 2021 came from just nine companies, eight of which are banks or miners. Overall, banks and miners delivered three-fifths of the $212bn increase in 2021.
The mining sector distributed $96.6bn in 2021, with BHP becoming the world's largest dividend payer. This is almost double the previous record from 2019 and ten times more than during the sector's slump in 2015-16.
However, 90% of companies overall raised or held dividends, indicating broad-based growth.
By sector, dividends from consumer discretionary and industrial companies grew by 12.8% and 10.0% respectively on an underlying basis, while healthcare and pharmaceutical groups saw their dividends grow by 8.5%. Technology companies, whose growth continued relatively uninterrupted by the pandemic saw an increase of 8.0%.
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Records were broken in various countries, but growth was fastest in parts of the world that had seen the biggest declines in 2020, especially Europe and Australia. One third of the dividend rebound came from UK and Australia alone.
In the UK, dividends rose 44.3% on a headline basis in 2021, an increase of $28.9bn, second only to Australia. This was driven by record dividends from the mining sector. However, UK banking dividends returned to only half of their pre-pandemic strength and oil payouts fell compared to 2020. Overall, three quarters of UK companies saw dividends increase or remain the same as 2020.
Janus Henderson said that the exceptional strength of the previous quarter's dividend figures, along with improved prospects for 2022, have led the firm to upgrade its forecast for the rest of the year.
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Jane Shoemake, client portfolio manager, global equity income said: "A large part of the 2021 dividend recovery came from a narrow range of companies and sectors in a few parts of the world. But beneath these big numbers, there was broad based growth both geographically and by sector.
"In the context of the dramatic rebound seen in the banking sector, and the exceptional cyclical surge from mining companies, it would be easy to overlook the encouraging growth seen from those sectors that have delivered consistent increases in recent years, like the technology sector.
"The same applies to geographical trends. The US, for example, is often ahead of its peers but saw slower dividend growth than the rest of the world in 2021. This was because it proved to be resilient in 2020 so there was limited scope for a large rebound. We expect many of the longer-term dividend growth trends witnessed since the index was launched in 2009 to reassert themselves in 2022 and beyond.
"The big unknown for 2022 is what happens in the mining sector, but it is reasonable to assume that dividends here will be lower than the record levels achieved in 2021 given the significant correction in iron ore.
"Having underperformed other equity markets in recent years, the UK equity market looks very attractively valued on both an earnings and dividend yield basis and we have exposure to a number of UK companies that are trading at a significant valuation discount to their international peers."
