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.
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