European companies should distribute 387 billion euros to their shareholders against 382 billion in 2022, according to the annual study of Allianz Global Investors.
by Isabelle Chaperon
Despite the threats that weigh on growth, dividends paid by European companies should fly to a new record in 2023. According to the annual study of the management company Allianz Global Investors, published Thursday, January 26, companies From the MSCI Europe index distributed in 2022 to their shareholders 382 billion euros, up 23 %. Which constitutes an never reached level.
Soon exceeded? Allianzgi provides that in 2023, European companies should increase this windfall by 1.3 %, to bring it to 387 billion euros. Enough to feed the controversy, in the flammable context of pension reform in France, at a time when work income is cropped by inflation.
The dividends which will be paid in 2023 will be calculated according to the results obtained on the previous exercise. “In a year 2022 difficult to economic and geopolitical, the benefits of companies have resisted well,” said Jörg de Vries-Hippen, head of European actions at Allianzgi.
Much appreciated by investors
However, the prospects for the current year are also taken into account. For this reason, we could expect the leaders to be cautious in such an uncertain situation. But as much as the dividend is criticized by policies, union officials and a good part of public opinion, as much it is very appreciated by investors.
“Between 1976 and at the end of December 2022, the dividend represented almost 35 % of the performance of MSCI Europe”, underlines Hans-Jörg Naumer, at the head of a research department at Allianzgi. When the scholarships are heckled, as in 2022, these payments can partially compensate for the fall in prices. For their part, as any negative announcement on the dividend is likely to be perceived as a sign of distrust by the markets, the financial directors retain a limited room for maneuver, even in large weather.
“Dividends tend to be more stable than business profits. Dramatic events must intervene so that they cut their dividend,” added the study author. In 2020, during the COVVI-19 pandemic, 75 % of companies in the Stoxx Europe 600 index returned money to their shareholders, against around 90 % traditionally. That year, 65 % of CAC 40 members served their shareholders, after the call for “moderation” launched by a French government, wishing to prevent money from the taxpayers to be used to enrich shareholders .
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