The worst of the dividend cuts are now behind us, but don’t expect payouts to grow in general until after the anniversary of lockdown at the end of March next year.

That’s according to asset manager Janus Henderson, whose latest Global Dividend Index showed that dividends from UK-listed firms fell 41.6% in the last quarter to their lowest total in a decade.

The UK stock market has suffered deeper dividend cuts than most other parts of the world, and a big chunk of the fall in payouts has been attributed to the banks being barred from distributing cash, as well as both oil majors BP (BP.) and Royal Dutch Shell (RDSB) slashing their payouts and mining giant Glencore (GLEN) cancelling its dividend.

But on the flip side Janus Henderson sees other companies restarting payouts again, such as plumber Ferguson (FERG) and alcoholic drinks maker Diageo (DGE), and believes Q3 this year marked the low point for shareholder payouts.

It expects the dividend outlook to improve from April 2021 onwards, but warns there is a clear divergence in different stock markets – the UK, Europe and Australia are the worst affected, Japan somewhere in the middle, while emerging markets (thanks in large part to China) and North America are proving most resilient.

The US is set to hold up well as shareholder yields are typically split 50/50 between dividends and share buybacks, with the latter being cut to ensure the former is relatively protected.

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