Posted on 12/08/2017 11:10:51 AM PST by spintreebob
With unemployment low and demand for new homes high, a company like Home Depot could be spending most of its surplus billions on raises for workers or the rollout of new stores.
Instead, it is using $15 billion to buy back shares of its own stock, a move that will reward shareholders including chief executive Craig Menear.
Home Depot’s statement was a reminder that corporate America may have other plans for that cash.
Several companies already have indicated that they will use excess funds to pay off debt, increase dividend payments or repurchase their own shares rather than create new jobs or raise wages. the consensus is that workers will be last in line.
The chain’s founder, Bernie Marcus, was among President Trump’s staunchest supporters during the 2016 campaign, once writing that “the fate of this nation” depended upon his election.
Now, the White House website features a Marcus opinion piece praising the tax cut as “the gift that keeps on giving.” Home Depot last month issued a statement praising the plan for “improving the competitive position of companies so they can create more jobs.”
Several corporations, including AT&T and CVS Health, have publicly touted plans to funnel tax savings into new spending on equipment or hiring. The telecom giant has vowed to boost its annual investment next year by $1 billion, about a 4 percent increase from last year’s $22 billion total.
Over the past five years, companies in the Standard & Poor’s 500-stock index spent $2.6 trillion acquiring their own shares. Information technology companies such as Google’s parent company Alphabet led the way with big banks such as Wells Fargo and Citigroup close behind. Dozens of companies so far this year, including marquee names such as Apple, JPMorgan Chase and Boeing, have spent big on their own stock.
(Excerpt) Read more at washingtonpost.com ...
The owners deserve the reward for owning.
What? If they want to expand why not spend the money on expansion instead of stock buyback?
The increased earnings they may realize from paying less in dividends is trivial compared to the cash they have to use to buyback the stock.
lol...
So they are going to make the companies more fiscally sound, increase the value of retirees 401Ks and IRAs and generate more tax revenue on capital gains from trades, and put dividend money in stockholders pockets (which will of course be taxed). How selfish and horrible.
The tax cuts will be a boon for businesses bottom lines. That's a given, and isn't a bad thing in and of itself. But don't lie and sell it as something it isn't. It won't necessarily lead to more jobs or higher wages.
I am not sure where the government or the citizens get to tell business what is right for them. Businesses are run by the shareholders. They are not not-for-profit organizations.
If they want to buy back shares, they can. It will make the price of the shares rise—and at Home Depot I believe that every employee is a shareholder. I can attest to the fact that places where I worked that had an Employee Ownership plan there was a lot more attention paid to expenses and sales.
So, good for Home Depot. I hope every shareholder becomes a millionaire.
Period.
Full Stop.
Go out and buy an Econ 101 book and stop displaying your asshattery in public.
Its embarrassing.
That wasn't good enough, so the fat cats at Home Depot bankrolled the corrupt campaigns of politicians to keep those borders wide open.
How'd all work out for the American working class Pietro?
It should also be noted that corporations often buy back their stock to protect themselves from hostile takeovers by those who are cash heavy. Lots of wealthy investors and corporations happen to be cash heavy right now.
So? Many companies had to increase their debt just to survive Obamanomics. Time for recouping doesn’t come around every day.
Laugh it up.
If you want you can take from what’s yours and give gifts to Home Depot workers.
Unless Home Depot is in arrears to them they have no claim and it is fine and good if it decided to reduce it’s structured debt.
Money invested in stocks or buying back shares, does stimulate the economy.
If it didn’t, there wouldn’t be a stock market.
The purchase of stocks help support companies. Those companies hire, buy and sell goods and services.
Who knew?
Seems like a normal business type deal.
“Is FAKE placement of information fake news?”
Yew betcha.
It’s just good management to buy back stock that had to be issued to generate cash. Any well-run corporation does it.
Did the ComPost report on what the millionaire Wall Street bankers did with the money 0 stole from us and gave to them?
I don’t do Home Depot. I don’t support organizations who for decades have allowed illegal aliens to camp on their properties so they can be farmed out for cheap labor.
This makes them de facto Home Depot employees from my perspective.
But you support Home Depot, right Rurudyne?
The increased earnings they may realize from paying less in dividends is trivial compared to the cash they have to use to buyback the stock.”””
Maybe for one dividend payment cycle-—but in the long run, NO.
So you agree with democrats?
Such and A-hole.
Those shareholders are Granny and Grampa, who rely on higher priced shares and dividends for their retirement...
In regards to what?
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