Leading oil and gas
Big tech companies like Microsoft and AT&T often top the index, “but it’s different now,” says Janus Henderson’s Sander van der Ernst, head of Europe, the Middle East and Africa. “Because of the energy crisis, oil and gas companies have been able to significantly increase their payments.”
Financial institutions also distributed more dividends than usual. “They were able to continue their recovery after the coronavirus and were of course also able to benefit from the improved interest margins,” explains Van der Ernst. “And in Europe in particular, we have seen strong consumer demand and rising prices for cars and luxury goods.”
“As the Netherlands, we are a bit behind.”
In Europe, dividend payments grew by about 20% on average, while in the Netherlands it was lower – 16%. “So we fell a little behind,” notes Van der Ernst. ‘That has to do with the type of companies we have in the index here. On the positive side we see that Heineken has made a significant contribution, but on the negative side we see Philips. He lowered the dividend payment. And this is historic, says Van der Ernst. It is the first time in years that the Dutch company has done so.
Less growth expected in 2023
Van der Ernst does not expect dividend growth like last year before 2023. A major factor is inflation, it is not yet clear what it will do. Van der Ernst also expects lower consumer demand, coupled with higher interest rates on loan repayments. On the other hand, he sees that China’s economy is recovering and that financial institutions can benefit from higher interest rates this year. ‘If we add up all the advantages and disadvantages, we expect modest growth of around 2.3%. This translates into an amount of approximately 1.6 trillion dollars, i.e. 1.6 trillion.’