Global dividends hit record US$2.09 trillion in 2025, driven by tech and finance

According to the latest Dividend Watch report by Capital Group, a US asset manager overseeing US$3.3 trillion in assets, total distributions from 1,600 major publicly traded companies increased by 7% year on year.

Core dividends, which account for one-off payments and exchange rate fluctuations, similarly grew by 6%.

Capital Group, which has been compiling this quarterly report for 15 years, tracking firms that represent approximately 85% of global market capitalisation, anticipates this momentum will continue.

The firm forecasts that total dividend distributions will climb another 5.4% in 2026 to reach US$2.2 trillion, with core dividends projected to rise by 5.7%.

This record-breaking era for shareholder returns is fundamentally anchored by strong corporate earnings.

Over the past year, results consistently beat market expectations, pushing the MSCI World Index and major US stock benchmarks to historic highs, aided heavily by growing optimism surrounding artificial intelligence.

Sector-wise, financial and technology institutions were the primary catalysts for this dividend growth.

Payouts from diversified financial firms leapt by 17%, while insurers saw a 13% rise.

The technology sector, driven predominantly by IT services and software providers, mirrored this with a 13% increase in core dividends.

Additional upward momentum came from the pharmaceutical, utility, media, and machinery sectors, specifically defence and aerospace.

Conversely, cyclical industries facing weaker profit margins, such as mining, auto manufacturing, and oil, gas, and energy production, lagged behind with reduced payouts.

On a geographic scale, 30 out of the 46 markets monitored by Capital Group achieved record dividend distributions last year, including Taiwan, Singapore, the US, and Japan.

Japan stood out as the leader, delivering a 13% increase that roughly doubled the global average.

Meanwhile, growth across emerging markets, Europe, and the US maintained a steady pace between 6% and 7%.

In Asian financial hubs, performance was particularly notable.

Hong Kong’s core dividends surged past a previous peak set in 2017, growing 8.5% to reach US$25.5 billion.

In mainland China, overall payouts rose by 2.3%, marked by a significant operational shift as more corporations abandoned the traditional single annual dividend in favour of distributing two smaller payments.

Capital Group executives emphasised the strategic importance of these returns in the current economic climate.

Alexandra Haggard, the firm's head of asset class services for Europe and Asia-Pacific, noted that the 2025 records were backed by widespread sectoral and regional strength with very few weak spots.

Looking toward 2026, Haggard pointed to broadening equity markets and solid earnings outlooks as encouraging signs, reaffirming that dividends remain a crucial pillar of stability for long-term investors.

Echoing this perspective, Toby Chan, head of client group for Hong Kong and Greater China at Capital Group, highlighted that dividends act as a highly tangible method for companies to share their success.

Amid an environment clouded by tariff tensions, geopolitical uncertainties, and market volatility, Chan stated that companies demonstrating sustainable dividend growth offer vital portfolio stability.

He added that for investors across mainland China, Hong Kong, and Singapore, these payouts will continue serving as a highly dependable source of resilience and income.

South China Morning Post