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Why dividends still beat buybacks

Posted by Guru on March 28th, 2012

His investment style may be hot these days, but Federated fund manager Daniel Peris views it as the oldest way to play the market.

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.

Stock Buybacks On The Decline

Posted by DisciplinedInvesting on December 10th, 2008

For the third quarter of 2009, stock buybacks for S&P 500 companies declined to $89.71 billion versus $171.95 billion in the third quarter of 2007. Dividends were actually slightly higher coming in at $61.44 billion versus $61.21 billion in the third quarter of 2007.

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