We all know that money doesn’t exist and that it’s nothing more than virtual movements from one bank to another, but where is it all going exactly? Is it just fuelling the stock market, going round in circles and coming back to the original place it was in? The world’s biggest blue-chip companies have seen their dividend pay-outs top $1 trillion for the first time ever and yet there is not a lot of that filtering down into the economy. Where’s it all going?
Around the world, investors got the priceless sum of $1.027 trillion paid out in dividends in 2013. Never have dividends been so high and yet, there is nothing that seems to show that we are doing any better in terms of our growth or overall economic situation. Henderson Global Investors has just published a report showing that since 2009 dividends have increased by $310 billion and the total sum of the largest companies has never been better. There are some that must be getting a share of the pie that is overloaded with stodge and so much cream that they won’t know what to do with it. There’s no wonder that Facebook will snap up WhassApp for the unbelievable sum of $19 billion. The “incredibly valuable” app (in Mark Zuckerberg’s own words) will be adding to the portfolio of Facebook and bringing in greater returns on investors’ money (that’s the hope of the founder of Facebook, at least).
• For the first time ever it’s the Asia-Pacific region that has brought in the highest rate of growth for investors concerning dividends being paid out.
• The dividends from this region have increased by 79% since 2009.
• Global dividends have seen a rise of 43%.
• In 2009, global dividends stood at $717 billion.
• Australia is the best place to get dividends apparently, with a total pay-out worth $40.3 billion.
• Australia saw a rise of 10.2% in 2013.
• As a measuring stick the USA only increased its dividend pay-outs by 1.1%.
• Hong Kong is second with $33 billion.
• Taiwan is the third best place with just $8.9 billion.
It’s the USA however that represents nearly 33% of the total pay-outs being made, at a grand total of $31.9 billion. US companies have increased their pay-outs by nearly 50% since 2009. Of course, you might not need to think very hard to see that it’s the financial sector that pays the most, paying out $218 billion. Only technology stocks have seen a bigger increase in percentage terms of their pay-outs to investors. This sector has rocketed by 15.5% standing at $62.2 billion for last year. Energy has been fairing rather well too with a total of $124.9 billion being paid out.
Europe has seen its dividend pay-out rise by 8% (excluding the UK) and this area now stands at $199.8 billion for 2013. According to Henderson Global Investors’ report the UK has seen an increase of 11% in the money being paid out in dividends, adding that this is disproportionate in comparison with the size of the UK economy and the economic activity of the country.
Whatever happened to the belief that companies liked re-investing (in particular US companies) so that they could develop research and come up with new ideas, building a stable economic outlook for the future? The Henderson Global Investors’ report has debunked that one lock, stock and barrel. Now, it’s more of ‘cut and run while you can’ rather than re-investing in the future. Today, it’s no longer a question of raking in the billions (let alone talking in millions, which we gave up long ago). Today, we can only talk in trillions.
What could you get for $1,000,000,000,000? Here are some ideas…
• 140 billion hours of labor in the USA.
• Take-on 18 million new teachers and pay them for the entire year.
• Ensure that Congress is running for the next 10 thousand years (perhaps we don’t need to add this to the list?).
• Be able to spend $1 million a day for the next three millenniums.
• Purchase 5.5 thousand US average homes…and so the list goes on.
The report by Henderson Global Investors will be published every quarter and was published for the 1st time today.
Originally posted: Dividends Reach $1 Trillion