Dividend payments in Europe in 2023: Further slight increase to €387bn

  • Allianz Global Investors forecasts an increase in dividend payments in Europe by more than 1 percent to €387bn in 2023
  • Allianz Global Investors Dividend Study 2023 underlines performance and stability contribution of dividends

26.01.2023 Investors in European equities can look forward to a warm dividend rain in 2023. According to calculations by Allianz Global Investors, companies in the broad European equity index MSCI Europe paid out around €382 billion to shareholders last year - a record figure.1 And they are expected to add to this in 2023: According to AllianzGI estimates, total dividends are expected to rise by more than 1 percent to 387 billion euros in 2023.

“In an economically and geopolitically challenging year 2022, corporate earnings have held up well across the board”, explains Jörg de Vries-Hippen, CIO Equity Europe at Allianz Global Investors. "In addition, the dividend policy of many companies is aimed at steady, sometimes even steadily rising payouts. Therefore, the companies included in the MSCI Europe are in a position to pay out even slightly more in dividends in 2023 than in the previous year. We forecast a new all-time high of 387 billion euros.” 

Allianz Global Investors Dividend Study 2023

As the AllianzGI Dividend Study 2023 shows, many European countries recorded an increase in dividend yields in 2022, after they had fallen steadily in previous years. In Germany and France, for example, the dividend yield rose from around 2 1/4 to around 3 1/2 and 3 percent respectively, and in Italy and Spain from just under 3 to 5 and 4 percent respectively. The decline in share prices observed across the board in 2022 also played a role here. In the UK, the dividend yield remained rather stable at just below 4 percent. In all the countries mentioned, however, the dividend yield continued to clearly exceed the nominal yields on 10-year government bonds.

For Hans-Jörg Naumer, Head of Capital Market Analysis and author of the study, this underlines the high performance and stability contribution of dividends to equity portfolios. “Dividends lend stability to many equity portfolios, especially in years with negative share-price developments - such as 2022. In such years, dividend payments can at least partially, sometimes even completely, compensate the share-price losses for investors. Moreover, according to our calculations, the average price volatility of dividend payers is significantly and systematically lower than that of non-payers - for the broad European stock market, we are talking about a difference of more than 10 percentage points.”2

The performance contribution of dividends is particularly evident in a long-term view and in Europe, where the dividend culture is traditionally stronger than in North America and Asia. In the 25-year period from 1978 to 2022, almost 35 percent of total equity returns in Europe were attributable to dividends. In North America and Asia, the corresponding figures were around 26 1/2 and 30 1/2 percent respectively.

“Dividends may not be able to weather every storm, which could be seen during the pandemic, for example”, Naumer summarises. “However, in many cases they exhibit a level of reliability that is very welcome, especially in times of disruption and turmoil. As a result, they make a big contribution to the overall return of equity investments.”

Notes for the editorial offices:

Link: Allianz Global Investors Dividend Study 2023 Dividends – resilience amidst turbulent waters

 

For further Information, please contact:  

Stefan Lutz Tel. +49 69 24431-4276 Email: stefan.lutz@allianzgi.com

Klaus Papenbrock Tel. +49 69 24431-2476 Email: klaus.papenbrock@allianzgi.com

Pia Gröger Tel. +49 89 1220-8267 Email: pia.groeger@allianzgi.com

About Allianz Global Investors:  

Allianz Global Investors is a leading global active asset manager. Our range includes equity, fixed income, private market and multi-asset strategies. Our expertise ranges from developed to emerging markets, from single country to global strategies, from thematic to sector portfolios. Through active asset management, we want our clients to feel well taken care of - everywhere and regardless of their investment needs.

Active is: Allianz Global Investors

  • Disclaimer
    1 Calculations by Allianz Global Investors based on various sources. On historic figures: In the last two years, the dividend payout figures calculated and forecast by AllianzGI were subject to greater uncertainty than in the past due to the pandemic. In this context, we had somewhat overestimated the momentum of the recovery in 2021, which also affected the estimate for 2022. Instead of the 410 billion euros forecast a year ago, the companies of the MSCI Europe actually paid out "only" around 382 billion euros in dividends in 2022.

    2 Basis: STOXX Europe 600; source: Bloomberg; own calculations.

    Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors might not get back the full amount invested. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer companies at the time of publication. The data used is derived from various sources, and assumed to be correct and reliable at the time of publication. The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail. This is a marketing communication issued by Allianz Global Investors GmbH, www.allianzgi.com, an investment company with limited liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42-44, 60323 Frankfurt/M, registered with the local court Frankfurt/M under HRB 9340, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht (www.bafin.de). Allianz Global Investors GmbH has established branches in the United Kingdom, France, Italy, Spain, Luxembourg, Sweden, Belgium and the Netherlands. Contact details and information on the local regulation are available here (www.allianzgi.com/Info). The Summary of Investor Rights is available in English, French, German, Italian and Spanish at https://regulatory.allianzgi.com/en/investors-rights.

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