Brazilian companies pay record dividends in 2021 and Vale is a global highlight

RIO DE JANEIRO, BRAZIL – Brazilian companies are paying record dividends in 2021, led by Vale, the world’s eighth-largest dividend payer, after iron ore prices soared, according to a report by asset manager Janus Henderson Investors.

Brazil accounted for more than half of emerging market growth, which totaled US$164.4 billion in 2021, also a record. The country’s companies paid out a total of US$25.4 billion in dividends in 2021, up from US$9.4 billion the previous year. That was the third-highest among emerging markets, behind China and Russia.

Almost half of the total amount distributed in Brazil, US$12.4 billion, came from Vale. The report said this amount was the second-highest-paid by a mining company globally, surpassed only by BHP.

The survey is conducted quarterly and annually and tracks dividends paid by the world’s 1,200 largest companies, measured by market value. Dividends are reported in dollars, including a currency effect, and are included based on the payment date.

Vale’s presence in the top 10 largest dividend payers follows a global trend, as mining companies and banks were the most significant growth drivers for the record amount of dividends paid globally in 2021.

Vale announced the resumption of its dividend policy in July 2020, after the mining company took a break of about a year and a half following the dam burst in Brumadinho (MG) in 2019, which killed more than 250 people.

The study also highlights Petrobras as the country’s main driver of dividend growth in 2021, with US$7.7 billion in payouts.

Among banks, Banco do Brasil, with US$1.19 billion, and Bradesco, with US$1.15 billion, are the top performers.

The only sector in the country to report lower dividends was beverages, as Ambev reduced its payout from US$1.2 billion in 2020 to US$223 million in 2021.

GLOBAL RECORD.

Global dividends reached a record US$1.47 trillion in 2021, a nominal increase of 16.8% from 2020. Adjusted for special dividends, exchange rate fluctuations, time effects, and index changes, the increase was 14.7%.

Mining companies account for more than a quarter of the current increase, reflecting the substantial rise in commodity prices. BHP became the company with the highest dividend payout worldwide, with Rio Tinto third and Fortescue tenth.

The resumption of distributions by companies that had suspended their policies due to the pandemic in 2020 contributed to an increase in the figures, as did the banks.

Janus Henderson expects global dividends to reach US$1.52 trillion in 2022, which would set a new record, supported by expectations of rising numbers at oil companies.