The amount paid out by big companies to their investors plummeted between April and June as firms cancelled or cut their dividends to conserve cash during the coronavirus pandemic crisis.
Total shareholder payouts made globally slumped by $108.1bn (£82.6bn) to $382.2bn, a fall of 22%.
A quarter (27%) of companies expected to pay a dividend in the second quarter slashed their payments, while half of that group cancelled the payout altogether.
Analysts at the asset manager Janus Henderson studied dividends paid by the world’s 1,200 largest companies, and found the largest quarterly drop in their global dividend index since its creation at the end of 2009 following the global financial crisis.
Amid travel restrictions and lockdowns across wide swathes of the globe during the second quarter of the year, dividends fell in every region during the period, with the exception of North America.
Dividends were most affected in Europe and the UK. In the UK payouts fell by more than 50%.
Oil giant Shell slashed its dividend in April, the first time it had done so since the second world war, following a collapse in global oil prices, while banks HSBC and Lloyds were among those that coordinated a decision to halt payments for 2019 and 2020 following talks with the Bank of England.
Mining giant Glencore scrapped its dividend after slashing the value of its coal assets as it slumped to a loss in the first half of the year because of the impact of the pandemic.
“Most European companies pay just once a year in the second quarter, so a dividend cancellation has a disproportionately large impact on the annual total, but it also means 2021 should show a rebound in Europe,” said Jane Shoemake, investment director on the global equity income team at Janus Henderson.
“A temporary halt in dividends does not change the fundamental value of a company, though it can affect short-term sentiment, and it remains important for income investors to be diversified both by geography and sector,” she said.
Globally, Janus Henderson analysts noted sharp falls in payouts from financial and consumer discretionary firms, while dividends from healthcare and communications firms proved more resistant to cuts during the pandemic.
The analysts now forecast that in the worst-case scenario, global shareholder payouts could fall by as much as 25% on an underlying basis during 2020 to $1.1tn, down from the record $1.43tn paid out to shareholders in 2019. The best-case scenario would see a fall of 19%.
Shareholder payouts from Canadian companies proved to be resilient, and dividends grew by 4%, which the analysts attributed to the milder incidence of the pandemic in the country. Meanwhile only a 10th of US firms cut or cancelled their dividends.