Corps Have Nigh $2 Trillion Leftover After the Crisis
|February 13, 2014||Posted by Staff under Inequality / Concentration|
This 2014 excerpt of Quartz, Feb 12, is by Matt Phillips.
In the wake of the financial crisis, US companies have socked away a record $1.93 trillion in cash or liquid securities. So if they’re not investing it, what are they doing?
And paying dividends. At the end of January, some 420 out of the 500 companies that comprise the benchmark S&P 500 stock index paid dividends. That’s the most since 1998. And S&P companies say they plan to pay out roughly $330 billion in dividends this year—a new record high.
They’re buying back their stock.
The cash at these companies belongs to shareholders, not the management of the firms. Returning it either via dividends or buybacks is the right thing to do, if executives don’t see a productive place to invest that money.
Money floating around keeps interest rates low — regardless of the fact that the Federal Reserve continues to cut back on its bond-buying programs (QE).
Ed. Notes: Yes, that excess does belong to stockholders. So how long does management get to keep it? How is the delay legal, not theft? Why doesn’t the government enforce shareholder rights? The “recovery” may have been a boon for those corporations but for some penny investors a dividend check could come in handy right about now.