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Weekly Market Update

S&P 500 Share Buybacks

Head of North American Investment Strategy & Research

Insight of the Week

  • Frequently, companies use excess cash on their balance sheet to return wealth to shareholders, either through dividends or stock buybacks.
  • In the past, dividends were the preferred, however in recent years US firms find share buybacks to be more flexible and efficient.
  • Apart from improving shareholders value, share repurchases can also help firms better manage their capital structure, boost earnings per share, and sends a signal of financial strength to attract more investors.

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