Position Papers

How companies are putting their cash hoards to work, 3.7.12

Our position in brief

Corporate cash levels are at all-time highs, and income-hungry investors are devouring stocks that are paying out cash in the form of dividends. However, dividends aren’t the only use of corporate cash that matters. Capital spending, stock buybacks, mergers and acquisitions, and paying down debt -- all can enhance shareholder value. We understand the current hunger for dividends, but as growth investors we think long-term growth is at the very least as critical as dividends are in assessing the return potential of a stock.

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