Stock repurchases and dividend payouts continue to be a leading option for corporate America.
According to S&P Dow Jones Indices (which operates independently from S&P Capital IQ),
S&P 500 companies had $1.3 trillion in cash and equivalents, available for discretionary
purposes, on their balance sheets as of June 2015. This amount is increasingly being committed
to buybacks and dividends.
As investors consider how managements and boards of directors drive shareholder value, it is
instructive to consider how the current environment for corporate governance and investor
activism may contribute to future changes in corporate capital allocations. More specifically, we
think companies could be more willing to part with available cash on a combination of
buybacks and dividends, instead of or in addition to investment intended to grow businesses