The companies included in the S&P 500 index in 2014 may return to its shareholders about $1 trillion through the payment of dividends or the procedure of share repurchases.
For the last quarter of the amount spent on the share buyback, may have reached its historical record
This is stated in the study by Goldman Sachs. The index rose sharply compared to last year, when investors received only $800 million.
“On procedure of redemption of the company included in the S&p 500 index spent $476 billion In 2014, we expect the company will spend 23% more – $587 billion the Amount of dividends paid in 2013 amounted to $312 billion, in 2014 we expect growth of 20% to $375 billion,” – said in his note, Stewart Kaiser, a strategist from Goldman Sachs.
Technology companies spend on share buybacks and dividends are much higher than companies from other sectors. Goldman Sachs experts attribute this to the extremely high revenues recorded by the sector in recent years.
For the last quarter of the amount spent on the share buyback, may have reached its historical record, at least this is the assessment Hard Silverblatt, the main analyst of S&P Dow Jones Indices. Exact figures will be published this week.
However, the amounts that are directed to the back, probably for a long time at such a high level will not last. Investors will choose companies that in addition to increasing profits and increase sales. But for companies that increase profits through buybacks, investors will likely turn back.
“People are starting to get smarter: McDonalds and IBM for several years conducted buybacks, but the stock has stagnated. People want to see real earnings, real sales,” said Paul Nolte, portfolio Manager of Kingsview Asset management.
Meanwhile, companies continue to attract $200 billion in the quarter and do it starting in 2012