By Thyagaraju Adinarayan and Sujata Rao
LONDON (Reuters) – It will take a decade for dividend payouts to return to pre-pandemic levels, futures markets are suggesting, a gloomy view that is at odds with the recent equity rebound and investors’ confidence that payments will normalise far sooner.
The pandemic could see dividends fall by over $100 billion this year just in the United States and Europe, analysts tracked by Refinitiv I/B/E/S predict. The global drop may be as big as $400 billion, according to a Janus Henderson report.
(Graphic: Global dividends total since 2009 – https://fingfx.thomsonreuters.com/gfx/mkt/bdwpkzddevm/Pasted%20image%201598005728376.png)
But futures are pricing worse.
These derivatives, which allow punters to take a position on future payouts, imply S&P500 dividends will be 16% below April 2020 levels in 2029. For Europe’s STOXX600 <.STOXX>, futures price 2028 payouts 18% below 2019 levels.
(Graphic: No full recovery from COVID blow in divis for years? – https://fingfx.thomsonreuters.com/gfx/buzz/nmovawjojva/Pasted%20image%201600454919081.png)