Corporations Slash Dividends, Boost Buybacks: Q3 2005
by John Schroy filed under Corporate Managers
American corporations reduced the amount paid shareholders as dividends, on a annual basis, to the lowest level in nine years. (Federal Reserve Flow of Funds Accounts, Q3 2005, Table 102).
Although after-tax profits were 56% higher than last year, annual dividend payouts as of Q3 2005 were only 58% of amounts paid as dividends in 2004.
At the same time, companies radically increased amounts spent on repurchasing and retiring equity to an extraordinary annual rate of $446.2 billion, which was greater than the total amount spend for this purpose over the previous five years.