Published Sun, 10 Feb 2019 08:24:05 -0500 on Seeking Alpha
In my series of data posts, I had always planned to get to dividends and buybacks, the two mechanisms that companies have for returning cash to stockholders, at this point, but an op-ed on buybacks by Senators Schumer and Sanders this week, in the New York Times, will undoubtedly make this post seem reactive. The senators argue that the hundreds of billions of dollars that US companies have expended buying back their own shares could have been put to better use, if it had been reinvested back in their businesses or used to increase wages for their employees, and offer a preview of legislation that they plan to introduce to counter the menace. Like the senators, I am concerned about the declining manufacturing base and income inequality in the US, but I believe that their legislative proposal is built on premises that are at war with the data, and has the potential for making things worse, not better.
The Buyback Effect: Benign Phenomenon, Managerial Short-Termism or Corporate Malignancy? The very mention of buybacks often creates heated debate, because people seem to have very different views on its causes and consequences. All too often, at the end of debate, each side walks away with its views of buybacks intact, completely unpersuaded by the arguments of the other. The reason I believe is that our views on buybacks are a function of how we think companies act, what the motives of managers are and what it is that investors price into stocks.
a. Buybacks are benign
If... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST||265.92||0.0||0.00||5.42||2.05|
|SPDR S&P 500 ETF||292.23||0.0||0.00||5.24||1.80|
|PROSHARES ULTRASHORT S&P 500||31.23||0.0||0.00||0.00||1.16|
|PROSHARES ULTRAPRO SHORT S&P 500||28.66||0.0||0.00||0.00||1.16|
|POWERSHARES QQQ TRUST SERIES 1||189.71||0.0||0.00||1.45||0.77|
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