Operating Earnings Exceed Dividends Plus Buybacks In Second Quarter
The second quarter of 2009 is the first quarter buybacks plus dividends did not exceed operating earnings since the first quarter of 2007. Even taking into account the fact that buybacks in the 2nd quarter declined $6.58 billion and dividends declined $4.1 billion, operating earnings still exceeded the buybacks plus dividends total for S&P 500 companies.
A comprehensive research paper by DeAngelo, DeAngelo and Skinner covering corporate payout policy. The paper begins with a discussion on the distribution of free cash flow and just a few of the topics reviewed are: Are Dividends Disappearing, Why Do Dividends Survive, Signaling and the Information Content of Dividends, Taxes and Payout Policy, The Advantages of Stock Repurchases.