Dividend payers tempt investors as markets battle

In a low-growth global investment environment, equities that provide the bonus of consistent dividends become a compelling target.

According to the Henderson Global Dividend Index for last year's fourth quarter, a report analysing global dividend payment trends, dividends achieved a record $1.12-trillion (about R13-trillion) in payments for the year, up 10.5% on 2013.

The index shows dividends have grown nearly 60% since 2009 with 2014 seeing the quickest growth since 2011. The fourth quarter saw a slowdown, which is expected to last into 2015.

The total figure was somewhat distorted by some special dividend payouts, most notably Vodafone's large first-quarter payout.

The dollar's strength weighed on total dividends paid out globally, but investors in US markets were the main beneficiaries of healthy dividend policies. The year-on-year increase in US dividends eclipsed the entire Japanese payout for 2014.

In emerging markets, headline dividends fell 11.7% to $114-billion through fewer special dividends, currency depreciation and index changes.

"Of the Brics countries, only China saw headline growth. Russian payouts halved," the report said.

Among South African companies, payouts declined from $9.9-billion in 2013 to $8.5-billion in 2014.

Mainland Europe's headline dividend growth was 12.3% to $229.4-billion, led by Spain and Switzerland.

The UK had a record year because of Vodafone's special dividend - which accounted for a fifth of all UK payments - although appreciation in the pound detracted from growth in underlying dividends.

Performance diverged widely across industries. Mining had a third successive year of declines, but technology companies and those exposed to consumer discretionary spending did well. The oil industry remained the second largest for dividends.

Henderson expects oil producers to sustain payouts even through periods of lower oil prices .

Henderson's 2015 forecast is for dividend payouts to reduce on dollar strength and a lower oil price.

By sector, Henderson said utilities performed the worst, and basic materials companies saw dividends decline 3.7%. Financial companies were by far the largest dividend payers in the US and Europe.

Royal Dutch Shell is "commonly the largest dividend payer in the world, although it was beaten in 2014 by Vodafone". T hese two were followed by China Construction Bank, Apple and HSBC Holdings .