The first quarter of 2022 started with good news for the Brazilian economy with positive results from several companies after the pandemic
The 34th edition of the report on investments worldwide by the Janus Henderson Group was recently released and pointed to a promising scenario for the economy in Brazil in the first quarter of 2022, after the pandemic. Miscellaneous Brazilian companies showed an increase in the payment of dividends, especially the large mining company Vale, which is among the 10 largest payers in the world. The recovery is substantial and brings optimism.
Vale had a drop in dividends, from US$4 billion to R$3,6 billion between half of 2021 and the first quarter of 2022 due to the fall in the price of ores. However, due to its importance and size of the company on the world stage, it managed to remain in the list of the 10 largest dividend payers, in ninth place, ahead of the giant Apple.
Considering Brazilian industries, the quarterly total for Brazil reached the mark of 7,4%, adding to this figure some decreases at Banco Bradesco and increases at Ambev, which were remarkable. However, in the Latin American scenario, there was a growth of 38,8%, largely driven by Grupo México. The only countries that had a large drop in dividends, according to the report, were the United Kingdom and Japan, with rates registered at -21,5% and -15,2%, respectively.
Check out a little more about the signs of economic recovery in Brazil with the video below
In the Emerging Markets Companies category, the increase was also significant, mainly due to the mining market
The category of 'Emerging Market Companies', in which Brazil is also classified, recorded a 45% increase in dividend payments in the first quarter of 2022, compared to the same period in the previous year. This rate was the highest, followed by Europe (excluding the United Kingdom) which registered only 14,9%.
In the global scenario, dividends hit a record with a total of US$ 302,5 billion, with a growth equivalent to a rate of 16,1%. This can be explained by the increase in dividends in the mining and energy sector and in oil companies, which reached 29,7% and 31,8%, respectively, in the first quarter of 2022. Thus, an unprecedented payment of more than of US$ 100 billion in dividends from mining companies.
Experts point out that the war in Ukraine has a great influence on this scenario, stimulating the increase of dividends in the main affected sectors: oil, mining and the energy.
However, much of this result is due to the normalization of payments in the recovery of the economy in Brazil and in the world after the pandemic. However, the second half of 2021 added to the first quarter of 2022 demonstrate that the result is more than just the result of the normalization of payments, as there was an important economic recovery.
The economy in Brazil was not the only one to recover, as the report points to a global increase in dividends
Emerging Markets weren't the only ones to see a dividend increase, as it was global. Of all 1.200 companies analyzed, 94% showed an increase in dividends or remained stable in this first quarter of 2022.
The United States of America (USA) also had interesting results, as expected. Over there, overall dividends increased by 10,4% and reached the impressive historic mark of US$ 141,6 billion. However, according to the report, 99% of companies showed good results, with an improvement in dividends or stability in the first quarter of 2022.
The forecasts of the Janus Henderson Group are positive for the economy in Brazil and in the world
In view of this sequence of positive results, the Janus Henderson group made an annual forecast of US$1,54 trillion for 2022, which is equivalent to 4,6% of the total obtained in 2021. The group's members are optimistic for 2022 , but the forecasts calculated for the next few years remain the same.
The world is experiencing a scenario of challenges, heightened by the war in Ukraine, inflation and rising interest rates and the end of the pandemic, which could have an impact on business profits in several segments.
“These challenges also mean greater uncertainty that is likely to affect corporate decision-making. The dividend impact is likely to show beyond 2022, but it's important to remember that dividends are much less volatile than earnings. The latter often move dramatically through the economic cycle, but dividends tend to be much more stable. Indeed, the fact that dividends have already surpassed pre-pandemic highs is part of a long-term narrative that highlights how dividends have proven to be a reliable source of long-term income growth. Furthermore, this growth means that dividends offer some shelter from inflation, which cash savings cannot do.”
Jane Shoemake, Portfolio Manager, Global Equity Income Team, Janus Henderson Group.
O group highlights that these values are based on the analysis between periods of the 1.200 main global companies that make up the index. Therefore, one-off dividends, affected by geography or sector, are not considered.
