Flashback Sequence

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What's going on?

Dividend payouts are on course to hit $1.4 trillion this year, as cue the wavey camera effect companies and investors are reminded what it was like back in the good old days.

What does this mean?

Companies paid out $472 billion worth of dividends in the second quarter of 2021, up 26% from the same time last year. And sure, the jump was always going to look big given that companies were clinging onto as much cash as they could a year ago. But even if you block out the last twelve months (and we often try), payouts were only 7% lower last quarter than they were at the same time in 2019. In other words, were edging closer and closer to pre-pandemic levels. That gaps only set to close too: research out on Monday from Janus Henderson showed that 84% of companies are planning to maintain or increase their dividends this year. That would bring total shareholder payouts this year to $1.4 trillion just 3% below the beforetimes.

Why should I care?

For markets: Who are the big payers?

If youre looking for the biggest dividend-payers, mining companies whose earnings came back swinging with commodity prices earlier in the year could be a good bet, along with industrials, banks, and consumer discretionaries (tweet this). Defensive sectors like consumer staples and telecoms, meanwhile, are lagging behind, while the pandemic-battered travel and leisure industries need every dollar they have right now.

The bigger picture: Where are the big payers?

As for where in the world to look, the UK and Europe whose second-quarter payouts were up 61% and 66% respectively are good leaping-off points, while Canada helped drive North American payouts to a record high. Asias 45% dividend growth looks good too, with Korean giant Samsung even poaching the title of worlds biggest dividend payer from Switzerlands Nestl. Youd do well to avoid emerging markets, though: the pandemics still giving their economies a particularly hard time, and their payouts fell 3% versus the same time last year.

Originally posted as part of the Finimize daily email.

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