Allianz GI | After a drop in dividend payouts related to the coronavirus crisis in 2020, companies in the MSCI Europe European equity index increased their payouts again last year by around a third to a record €378 billion. And this trend is likely to continue again in 2022: according to our forecasts , a further increase in total dividends of around 8 percent to around €410 billion is expected by 2022.
“Differently from the general economic picture, dividend payments in 2021 showed a pronounced V-shaped development,” explains Jörg de Vries-Hippen, Chief Investment Officer European Equities at Allianz Global Investors. “At around €378 billion, dividends in 2021 returned to the trend that had been in place until 2019. And in 2022, they are likely to continue to rise, to a new record level of around €410 billion.” In many European countries, the number of companies that paid dividends was slightly lower than those that paid dividends before the pandemic. But those companies that paid dividends were able and willing to offer more to their shareholders after the meager figure of the previous year because of the health crisis. “This once again reflects that the dividend policy of many companies aims for constant, sometimes even increasing, payouts,” says de Vries-Hippen.
By 2022, we expects double-digit growth rates in dividend payments in the largest European countries, such as Germany, France and Italy (with increases of 10 to 13 percent each). In Spain, which has weathered the waves of the pandemic relatively well in recent months, it may even rise by 15 to 20 percent. Our country is in the top 5 in Europe and in the top 3 in the euro zone in terms of dividend yield. In Great Britain, on the other hand, dividend increases are likely to be more modest, averaging around 4 percent. According to de Vries-Hippen, the continuing burdens on the British economy related to Brexit have something to do with it.