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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
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...
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- Spring '11