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Shareholders Take Most Corporate Profits

Analysis shows S&P 500 are spending 95 percent of earnings on share buybacks and dividends.

By Lu Wang and Callie Bost, Bloomberg | Updated on October 06, 2014

Companies in the Standard & Poor’s 500 Index really love their shareholders. Maybe too much.

They’re poised to spend US$914 billion on share buybacks and dividends this year, or about 95 percent of earnings, data compiled by Bloomberg and S&P Dow Jones Indices show. Money returned to stock owners exceeded profits in the first quarter and may again in the third. The proportion of cash flow used for repurchases has almost doubled over the last decade while it’s slipped for capital investments, according to Jonathan Glionna, head of U.S. equity strategy research at Barclays Plc.

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