Author Topic: "Dividends and Buybacks Now Larger than Earnings for S&P 500" - article  (Read 975 times)


bacchi

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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

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mizzourah2006

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A couple things..

1. Many older companies were already at 50-70% of earnings as dividends (think your Coca Colaís, 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 arenít coming from earnings because the business isnít required to count that money as earnings (which would require corporate taxes to be paid).