The tax cut will increase the after-tax return on dividend-paying stocks relative to all other assets, including tangible assets like land, commodities and used cars.
Now calculate a real aftertax total return, the sum of the returns on dividends and capital gains.
That means low debt-to-equity ratio, high interest coverage (where interest income substantially exceeds interest expense), increasing revenues and earnings, high return-on-equity and a dividend-payout ratio (earnings-to-dividends paid) no higher than 60% (except for utilities, REITs, and MLPs, which commonly have high payout ratios).
Whatever happened to improving profitability, increasing return on investment, boosting dividends, jettisoning lackadaisical management, resisting deceptive accounting procedures, lobbying for deregulation and tax cuts, devising creative acquisitions and divestments and generating positive excitement in the investing world?
In addition equity investors expect a return (via dividends or capital gains on their shareholding) of around 12%, compared with the 4% or so demanded by bondholders.This sets up a tension between stability and profitability which banks' bosses must manage.
Not that Kohler stock would be such a bad deal: Executives are able to buy and sell shares from Kohler at book value, which has compounded at an 11% annualized rate over the past 32 years easily beating the S&P 500′s 7.5% return, minus dividends on either investment.
The Treasury will invest $2.0 billion in the bank, in return for restrictions on dividend payments, stock buybacks and executive compensation.
Total return after dividends was minus 19%.
According to the White House, ending the double taxation on dividends would return $20 billion to the economy this year alone.
How has the tax cut on dividends affected returns on utility stocks? A. People seem to have forgotten it.
But while Murray's aggressive positioning on the return reaped dividends at times, Djokovic is nothing if not a fighter and eventually, tenaciously, he served out for the title.
