The covid-19 crisis has repercussions in many areas, including dividends. Worldwide, in the second quarter, shareholders received $ 382.2 billion compared to $ 500.3 billion last year during the same period, or 108.2 billion less over the first three months of the year. Dividends have thus fallen by 22% which represents “their biggest quarterly drop since the global financial crisis”, according to specialists from Janus Henderson Investors.

The lockdown has brought swathes of the global economy to a halt. Profits of publicly traded companies plummeted, impacting dividends. “More than a quarter of companies cut their dividends in the second quarter and more than half cut them altogether,” according to Janus Henderson Investors.

However, all regions have not been affected in the same way, in particular due to the difference in the progression of the virus but also to the measures put in place by different governments. If the Europe region was very strongly impacted, with a decrease in dividends of 45% in the second quarter registering a "staggering plunge" of 66.9 billion dollars to fall to 83.4 billion dollars; the situation is different in North America. This decrease is also explained by the fact that the banks, in order to grant their aid to companies, asked to waive dividends. The other companies preferred "to protect their balance sheets and preserve their liquidity to face the extreme uncertainty of economic forecasts", explain the specialists. Janus Henderson Investors also notes a very strong disparity depending on the Country. "France, Spain, Italy and Sweden recorded the biggest declines, Germany was much less affected, and Switzerland was not affected at all."

In France, "dividends fell 57%, falling by $ 13.3 billion, which is by far the worst period on record." “A third of the drop is linked to French banks” according to Janus Henderson; "The consumer and industrial sectors have also been hit hard."

The finding is as follows: dividends have fallen in virtually all regions of the world except North America, where they have remained virtually unchanged. In the United States, most corporations determine their dividends once a year and pay them in four equal installments. American companies favor another form of remuneration, the buyback of shares. The latter have drastically reduced this method of remuneration for shareholders. Goldman Sachs estimates there were $ 700 billion in share buybacks last year. "So, stopping them results in immediate cash savings for American companies."

To conclude overall of 2020, Janus Henderson anticipates a drop of between 17% and 23% in global dividends (an optimistic and pessimistic view). They should then represent a total amount of 1100 billion to 1180 billion dollars.