"Dividends and Buybacks Now Larger than Earnings for S&P 500" - article

[RedmondStash]

https://thesoundingline.com/dividends-and-buybacks-now-larger-than-total-reported-earnings-for-the-entire-sp-500

Thoughts?

[bacchi]

There was almost $500B in repatriated profits through Q3 2018. That's over 40% of total reported earnings.

Also, debt financed buybacks doesn't seem to be the trend.

 https://www.bloomberg.com/news/articles/2019-01-27/debt-financed-share-buybacks-dwindle-to-lowest-level-since-2009

I'd be more concerned about buybacks stopping and the party stopping with it.

[marty998]

https://thesoundingline.com/dividends-and-buybacks-now-larger-than-total-reported-earnings-for-the-entire-sp-500

Thoughts?

Do you have any thoughts on this?

If true, it can't go on forever... that's just simple maths.

[mizzourah2006]

A couple things..

1. Many older companies were already at 50-70% of earnings as dividends (think your Coca Cola’s, JNJs, etc.).
2. Buybacks often occur over extended periods of time with cash balances that have been accumulated over time.
3. Capital investments into the business aren’t coming from earnings because the business isn’t required to count that money as earnings (which would require corporate taxes to be paid).