U.S. companies are on pace to spend a record $1 trillion on buybacks and dividends in 2016. It'll be a tough record to top.
A total $600 billion in share repurchases and $400 billion in dividends will be doled out by S&P 500 Index members by the end of the year, the biggest combined payout in history, according to strategists at Barclays Plc. Gravy like that is getting tougher to sustain as corporate profits suffer a six-quarter slump and cash levels begin to dwindle.
As a result, fewer companies in the third quarter upped their dividend — and more are tapping the debt market to sustain their buyback programs, data from S&P Global Inc. and JPMorgan Chase & Co. show. For U.S. stock investors, it means a key pillar of the 7 1/2-year-old bull market may be tipping over.
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