Dividends and Buybacks Now Larger Than Total Reported Earnings for Entire S&P500

According to the latest figures from S&P Global, companies listed on the S&P 500 spent more on dividends and buybacks in 2018 than they actually made in total reported earnings ($1.26 trillion vs $1.1 trillion). To further put the enormous scale of buybacks and dividends into perspective, since the end of 2014, dividends and buybacks have actually exceeded the total increase in S&P 500 market capitalization by $1.3 trillion or roughly 47%. Companies are aware of just how important their buyback programs are to their share prices and it’s hard to see them stopping unless the cost of borrowing forces them to do so.

Source: thesoundingline.com