NEW YORK (AP) — Companies continued rewarding investors with healthy dividends in 2023 even as they tread more cautiously with returning profits through stock buybacks.

Dividends hit a record $1.66 trillion globally last year, while stock buybacks eased. Investors can likely expect more dividend growth through 2024, according to a recent report from Janus Henderson. At the same time, companies face more uncertainty on economic growth, inflation and interest rates, leaving them to find a better balance of paying off debt and buying back stock.

The rare decline for stock buybacks comes amid high interest rates pressuring corporate borrowing. Buyback amounts still remain far higher than before the pandemic, but the path ahead is unclear with interest rates expected to remain higher for longer.

The technology, healthcare and financial sectors had the biggest reductions in buybacks in 2023. U.S. companies in those sectors accounted for a large portion of the pullback. While U.S. companies remained the biggest buyers of their own stock, they also had the biggest reduction overall, cutting buybacks by 17%.

“It is all about companies finding the appropriate balance between capital expenditure, their financing needs and shareholder returns via dividends, buybacks or both,” said Ben Lofthouse, head of global equity income at Janus Henderson, in a report.

Companies are making strong profits as consumers keep spending on goods and services. Net profit margins for the S&P 500 were just under 10.8% in 2023. That’s down slightly from recent years but still allowing companies to stockpile cash while also keeping investors happy with healthy dividends.

Dividends have been rising steadily in the U.S. and globally since the pandemic in 2020. Last year 86% of companies globally either raised their dividend or held them steady, according to Janus Henderson.

Banks contributed half of the world’s dividend growth as higher interest rates allowed them to boost profits. Car makers were also a big global contributor to dividend growth. Profits in that sector rose along with prices for new and used cars.

Janus Henderson expects underlying dividend growth of 5% to $1.72 trillion in 2024.

Still, recent economic warning signs mean some uncertainty and potential caution for the rest of 2024. Economists expect economic growth to slow from the surprisingly strong pace in 2023. Inflation has been easing, but it still remains higher than the Federal Reserve would like. The latest data shows it seemingly stuck at 3%, above the Fed’s 2% target.

Wall Street entered 2024 with hopes for interest rate cuts in the U.S., but surprisingly strong economic data and stubborn inflation has clouded those forecasts. Persistently high interest rates could put increasing pressure on borrowing for consumers and businesses.