S firms from 1989 to 1998 is reported 26 figure 26

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Buybacks and Dividends: Aggregate for US Firms - 1989-98 $250,000.00 $ Dividends & Buybacks $200,000.00 Aggregate Dividends paid by US companies $150,000.00 $100,000.00 Aggregate stock buybacks by U.S. companies $50,000.00 $1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Year Data from Compustat. The stock buybacks and dividends represent the aggregate dollar values across all U.S. companies. Note that almost as much cash was returned in the form of stock buybacks in 1998 as was paid out in dividends that year. Since this represents a quantum leap over buybacks ten years prior, adding it to the dividend yield to come up with a consolidated measure of cash returned to stockholders may provide you with a more reasonable measure of cash payouts than looking at just the dividend yield. Sector Differences in Dividend Policy There are clear differences in dividend policy across sectors. In some sectors such as banking and utilities, it has long been customary for firms to pay out large dividends relative both to earnings (dividend payout ratios) and to market value (dividend yields). In other sectors, such as technology, firms have traditionally paid out littl...
View Full Document

Ask a homework question - tutors are online