Global Top 100 companies by market capitalisation
Comment of the Day

September 21 2018

Commentary by Eoin Treacy

Global Top 100 companies by market capitalisation

This report from PWC was dated March 31st but only crossed my desk this week and I thought it still worth highlighting not least because of the buyback figures for 2016 and 2017 which have been superseded this year. Here is a section:

Apple distributed $31bn to shareholders in dividends and share repurchases in 2017 - an increase from the $29bn distributed in 2016.

A total of $704bn has been distributed to shareholders by the Top 100 companies.

US companies, representing 54 of the Top 100 companies, accounted for $476bn of the total value distribution.

Unchanged from last year, companies in the Financial sector continued to return the highest total amount of $183bn (2016: $153bn) to shareholders, followed by companies in the Technology sector which returned a total of $121bn (2016: $110bn).

Share buybacks boosted the 2.2% dividend yield to an overall of 3.5% by reference to market capitalisation.

Eoin Treacy's view

The relative attraction of cash with interest rates at 2%, and soon to be 2.25%, is now better than the dividend yield on the S&P500 which is 1.79%. However, since so many companies are buying back their shares it is arguable whether this is a fair comparison. The total return on the stock market compared to a rolled yield on money market funds highlights how much of a spread in return there is between the two asset classes and the premium investors pay for safety outside of crises.

The S&P500 hit a medium-term low in February, spent seven months ranging with an upward bias and broke out to new highs in August. It reasserted on the upside this week and a break in the sequence of the higher reaction lows would be required to question medium-term scope for continued upside.

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