[Marxism] Surplus capital and investment in stocks: greater focus on dividend payouts, rather than speculative gains

["Jurriaan Bendien" <andromeda246@xxxxxxxxx>]

Companies have ample resources to increase dividends, says
David Wyss, chief economist at S&P. He notes that cash in the coffers of
companies in the S&P 500 stands at about $599 billion. And he believes that,
although some of the disbursements -- notably Microsoft's -- are clearly
one-time events, meant in part to take advantage of the tax law, dividend
payouts will remain higher, and more companies will begin regular payments.

This trend comes at a time when investors are showing greater interest in
dividends. Wyss says capital gains appreciation potential in the future will
probably be lower than in the go-go 1990s, when investors could rack up
double-digit gains even without dividends. For the next few years, says
Wyss, stock market appreciation is likely to be about 7% annually. In an
environment like that, dividends can add a big boost to total return. Since
1926, dividends have represented 41% of investors' total return. Wyss says
the current trend toward higher dividends is coming at a fortuitous time,
just as the baby boomers are moving closer to retirement.

Standard & Poor's chief investment strategist Sam Stovall agrees. "In this
challenging market, trading has been in a sideways pattern, and most
investors are not being rewarded by share-price increases, so a higher
dividend rate might be used to offset lackluster share-price appreciation,"
he says. Stovall does not think Bush will try to cut the dividend tax rate
any further. Instead, be believes the President will try to make the
existing cut permanent.

Complete text:
http://www.businessweek.com/investor/content/nov2004/pi20041118_4936_pi015.htm

If you are interested in how Bush I's taxation policy affected corporate
profits, check out
http://www.bea.doc.gov/bea/dn/home/corporateprof.htm .


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