World’s biggest dividend stocks in Q3 2023

Glencore has risen up the ranks of the world’s biggest dividend payers after its latest award bucked the wider mining-sector trend of sharply lower distributions.

The 30 US cents or 24p a share paid to Glencore (LSE:GLEN) shareholders on 22 September was the 10th largest sum in the third quarter and the biggest by a FTSE 100 company.

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The three biggest were China-listed followed in fourth place by BHP Group Ltd (LSE:BHP), even though the former blue-chip’s 28 September full-year dividend of $4.1 billion (£3.3 billion) or 80 US cents a share was more than half the level distributed the year before.

Rio Tinto Registered Shares (LSE:RIO) fell from seventh to 17th on the list compiled by Janus Henderson, having cut 21 September’s interim dividend payment by 34% to 177 cents a share. The award of $2.9 billion (£2.3 billion) dropped in line with its fall in earnings per share.

Glencore, which has moved up from 16th on last year’s third-quarter list, benefited from the resilience of commodities marketing as it distributed a top-up $1 billion (£800 million) or eight cents per share alongside the 22 US cents or $2.75 billion (£2.2 billion) already planned in relation to 2022 trading.

Other leading big dividend payers included Microsoft Corp (NASDAQ:MSFT) in fifth, Apple Inc (NASDAQ:AAPL) in ninth, Exxon Mobil Corp (NYSE:XOM) in 13th place and JPMorgan Chase & Co (NYSE:JPM) at number 18.

Shell (LSE:SHEL) has yet to win back its place in the top 20 after 2020’s dividend cut, even though new boss Wael Sawan increased 18 September’s latest award by 15% to $0.33 a share.

The support of Shell and BP (LSE:BP.) helped offset the dip in mining payouts as Janus Henderson reported that UK underlying dividends rose 1.5% when excluding special awards, currency movements and calendar factors. The unadjusted figure fell by 4.8%.

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Banks also supported UK income during the quarter, with Lloyds Banking Group (LSE:LLOY) paying shareholders an increased £594 million or 0.92p a share on 12 September.

A second interim dividend for 2023 of 10 US cents worth $1.97 billion (£21.6 billion) was paid by HSBC Holdings (LSE:HSBA) on 21 September but this was not enough to get the lending giant on the third-quarter top payers’ list for the first time since 2019.

Globally, banking dividends rose 9.3% on an underlying basis as the sector benefited from increased net interest margins driven by sharply higher central bank policy rates.

Cuts in the mining sector were four times larger than in any other sector, with dividends falling 36.9% on an underlying basis. Lower awards by Brazil’s Petroleo Brasileiro SA Petrobras ADR (NYSE:PBR) and from producers in Taiwan meant that oil dividends also fell year-on-year, although almost nine-tenths of the 51 firms made increases year-on-year.

Janus Henderson said that global dividends dipped by 0.9% in Q3 on a headline basis to $421.9 billion (£338.6 billion) but that underlying growth was 0.3% after adjusting for lower special dividends and a strengthening US dollar.

The large dividend cuts by Petrobras and BHP significantly skewed the growth rate, without which the underlying growth would have been 5.3%. The report adds that US dividend growth slowed to 4.5% but that 98% of companies increased or held payouts steady.

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Janus Henderson’s forecast for this year has reduced slightly to show a rise of 4.4% to $1.63 trillion (£130.8 trillion), reflecting lower special dividends and the strengthening dollar.

Underlying growth, however, is stronger than expected at 5.3% as several countries including the US, France, Canada, Switzerland and China are on track to deliver record payouts.

Ben Lofthouse, head of global equity income at Janus Henderson, said: “Dividend growth from companies generally remains strong across a wide range of sectors and regions, with the exception of commodity-related sectors, such as mining and chemicals.

“It is quite common and well understood by investors that commodity dividends will rise and fall with the cycle, however, so this weakness does not suggest wider malaise.

“Moreover, our figures show that a globally diversified income portfolio has natural stabilisers – sectors in the ascendance, such as banking and oil, have been able to counteract those with declining dividends.”