A gusher of cash for stock investors is getting capped
4 years, 8 months ago

A gusher of cash for stock investors is getting capped

Associated Press  

NEW YORK — A fire hose of cash that’s rained trillions of dollars on to those fortunate enough to own stocks is suddenly being choked off. This cash from dividends and stock buybacks has helped lift the stock market to record heights, soften the pain of its downturns and exacerbate the U.S.'s yawning income inequality. Angry about airlines and other industries that spent big buying back their own stock in recent years only to ask for a lifeline, Congress made it a condition of the recently passed $2 trillion rescue bill that companies who tap it can’t repurchase shares or pay dividends for a set period of time. Goldman Sachs predicts dividends will fall 25% this year and buybacks will plummet 50% for S&P 500 companies. ”Demonizing the only buyer” is how Canaccord Genuity equity strategist Tony Dwyer described it after Democratic presidential candidate Joe Biden called on U.S. CEOs to refrain from buybacks over the next year.

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History of this topic

Dividend stocks are primed for a comeback in 2025
1 month ago

Dividend stocks are primed for a comeback in 2025

Live Mint  

Dividend-paying stalwarts such as JPMorgan Chase and Merck are primed to fare better in the coming year, some investors said. But “that’s when you should be buying" dividend stocks, said Chris O’Keefe, portfolio manager at Logan Capital Management. The S&P 500 Dividend Aristocrats Index, which includes 66 companies that have raised their dividends every year for the past 25 years, …

As earnings season rolls into its heart, hopes rise for broader gains
8 months, 3 weeks ago

As earnings season rolls into its heart, hopes rise for broader gains

Associated Press  

NEW YORK — As the heart of earnings reporting season arrives on Wall Street, investors hope that many more voices will be joining the chorus of companies reporting stronger profits. Last year, Big Tech stocks were behind much of corporate America’s profit growth, and thus behind the majority of the gain for the S&P 500. But as defense contractors and …

Stock buybacks exploded after the tax cuts. Now they’re slowing down
5 years, 4 months ago

Stock buybacks exploded after the tax cuts. Now they’re slowing down

CNN  

New York CNN Business — Corporate America’s epic buyback mania may finally be succumbing to gravity. “Companies pounded their chest and rushed to show how much money they could return to shareholders via the new tax changes.” The pullback in buybacks may also reflect a desire by companies not to get stuck buying their own stock near record highs. Some …

Stock buybacks are reaching dangerous levels
5 years, 5 months ago

Stock buybacks are reaching dangerous levels

CNN  

New York CNN Business — The US-China trade war might be having a chilling effect on business investment, but it’s not derailing the splurge in share buybacks. “Payout ratios are elevated, cash balances have declined and leverage has risen to a new all-time high,” David Kostin, chief US equity strategist at Goldman Sachs, wrote in a recent note to clients. …

US companies’ tax windfall fuels record share buybacks
5 years, 9 months ago

US companies’ tax windfall fuels record share buybacks

Associated Press  

U.S. corporations spent a record amount buying back their own shares last year, using 2017’s tax-cut windfall to reward shareholders rather than to invest or expand their businesses. Companies in the S&P 500 spent $806 billion on stock buybacks in 2018, blowing away the previous record of nearly $590 billion set in 2007. “Buybacks were again favored over dividends in …

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