In the analysis below, Viktor Nossek, head of investment and product analytics, Vanguard, Europe, shares Vanguard’s Q3 dividend update, highlighting which regions, sectors and companies are driving growth in dividend payouts globally.
At first glance, dividend momentum in the third quarter appears to have cooled. However, a deeper analysis reveals the long-term resilience of payouts.
Global Overview
Worldwide dividend distributions remained broadly unchanged in Q3 at USD 577 billion (-0.1% year-on-year). After years of steady increases, this figure may seem disappointing and raise questions about whether it reflects a slowing economy. Yet, despite mounting challenges, 12-month payouts have risen by 6.5% to USD 2.2 trillion.
China’s Shift in Payout Cadence
One key factor behind the muted Q3 numbers is a structural change in China. Leading dividend payers, including the country’s “mega-banks,” have moved to a semi-annual payout schedule. This transition reduced the seasonal peaks we saw in previous years, resulting in a 40% year-on-year drop in Q3 dividends from China’s financial sector. Importantly, this timing shift does not affect total 2025 distributions.
Robust Growth Elsewhere, Energy Sector Headwinds
Outside China, dividends continued to build on prior growth trends. North America posted a 9% increase year-on-year, Europe ex-UK surged by 22%, and Japan delivered an exceptional 91% rise. Emerging markets grew by 5%, though headline figures were dampened by one-off cuts in the energy sector. While base dividends held steady, one of the world’s largest energy payers sharply reduced its performance-linked payout. Globally, energy dividends fell 17% year-on-year, driven by state-owned firms in emerging markets facing weak results and macroeconomic pressures.
Sector Highlights and Outlook
Dividend growth was strongest in industrials (+29%), consumer cyclicals (+23%), technology (+14%), and healthcare (+10%). The materials sector (+9%) rebounded on higher commodity prices, offsetting earlier declines.
Looking ahead to Q4, we expect Chinese payouts to normalise as timing effects fade. Commodity price dynamics and the rally in precious metals remain key watchpoints, as they support corporate cash flows and investor returns.
Allocation of global dividend distributions Q3/2025
Global dividend payouts since 2021
