1,900 companies have spent money on buybacks and dividends since 2010, and the combined
return of capital to shareholders for those companies equals 113 % of capital spending, according to Reuters.
However, many stocks offer dividends or
other return of capital to shareholders, and that added incentive can make a big difference compared to simply owning a physical good that can't produce any income.
Apple, which reports earnings after tomorrow's closing bell at which time it is expected to detail
a return of capital to shareholders, was among the bright spots, as was McDonald's, which had its biggest gain since October 2015 after reporting solid results.
Combined with earnings growth, we see
these returns of capital to shareholders offsetting some valuation challenges: Investors are typically unwilling to bid up equity valuation multiples when rising interest rates and inflation threaten to erode corporate profit margins.
Pending
the return of capital to shareholders, the cash proceeds of TLIs may be invested in a portfolio that may include US treasury bonds, UK gilts and sterling - denominated corporate bonds with a minimum rating of AA by Standard & Poor's or an equivalent rating by another rating agency.»
The announced divestiture of $ 100 million in assets and
return of capital to shareholders has now been put on permanent hold.
Once things are bedded down, I still think
a return of capital to shareholders is inevitable, plus the fate of the Ryanair stake may be a catalyst also.
And we know this will trigger a value - event, as «the Board is actively considering, subject to the requirements of the Group's businesses,
a return of capital to its shareholders».
More steps / work to be done, but cost cuts & reversal of acquisition strategy should now protect the current cash pile for shareholders... noting that, and a new focus on shareholder value,
a return of capital to shareholders is now inevitable.