Worldwide stock dividends reached a record $1.027 trillion in 2013, up 43 percent from $717 billion in 2009, according to a study from
Henderson Global Investors.
The increase "illustrates that dividends are now a vital component of investors' returns," says Andrew Formica, Henderson's CEO.
"The search for income is more than just a response to rock bottom interest rates in recent years. It marks a generational shift as aging populations must increasingly rely less on state pensions and more on their own savings to provide for retirement."
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With lifespans increasing, people will have to keep their stock investments for longer than those did in the past, Formica notes. "This demand for equity income is a trend we see continuing through 2014 and beyond."
Emerging markets experienced the fastest rate of growth, with their companies' dividends more than doubling to $125.9 billion in 2013 from $60.9 billion in 2009.
Dividends from U.S. companies increased by 49 percent to $301.9 billion, accounting for one-third of the global total.
Dividends from companies in Europe, excluding the United Kingdom, gained 8 percent to $199.8 billion.
Meanwhile, experts say it's safest to invest in companies with low to moderate dividend yields that can raise their payouts.
"There's a good chance of finding companies with 1 percent or 2 percent yields today, whose payments could grow quickly — even double — over the next five years," writes
Jack Hough of Barron's.
He says candidates include American International Group, Halliburton, Ingersoll-Rand and Discover Financial Services.
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