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S&P 500 companies return $1 trillion to shareholders in tax-cut surge

S&P 500 companies return $1 trillion to shareholders in tax-cut surge


Traders work on the floor of the New York Stock Exchange in the borough of New York City, New York, U.S., April 17, 2018. REUTERS/Brendan McDermid

In the 12 months through March, S&P 500 companies paid out $428 billion in dividends and bought up $573 billion of their own shares, according to S&P Dow Jones Indices analyst Howard Silverblatt.

That compares to combined dividends and buybacks worth $939 billion during the year through March 2017, Silverblatt said in a research note.

Earnings per share of S&P 500 companies surged 26 percent in the March quarter, boosted by the Tax Cuts and Jobs Act passed by Republican lawmakers in December.

Companies have been returning much of that profit windfall to shareholders via share buybacks and increased dividends at never before seen amounts, highlighted by Apple’s record $23.5 billion worth of shares repurchased in the first quarter.

GRAPHIC: Apple buys back, click reut.rs/2JIjkgo

Reuters Graphic

GRAPHIC: S&P 500 capex, click reut.rs/2KwYjWk

Reuters Graphic

S&P 500 companies have also plowed some of the windfall from lower taxes into investments toward growth or becoming more efficient. First-quarter capital expenditures totaled at least $159 billion, up more than 21 percent from the year before, according to S&P Dow Jones Indices.

The biggest overhaul of the U.S. tax code in over 30 years, the new law slashes the corporate income tax rate to 21 percent from 35 percent, and charges multinationals a one-time tax on profits held overseas.

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