Several S&P 500 Companies Step Up Capital Spending Faster Than Share Buybacks

  • Big U.S. companies, including Alphabet Inc GOOGGeneral Motors Company GM, and PepsiCo Inc PEP, have increased spending on real estate, equipment, and technology.
  • According to the Wall Street Journal report, the move is an encouraging signal to investors amid uncertain macroeconomic trends.
  • Based on results from roughly two-thirds of the companies in the S&P 500 index, capital expenditures have risen 20% from a year earlier to $149.8 billion, roughly in line with the first quarter’s growth rate. Share repurchases have climbed 10% to $160.8 billion, and dividends have increased 14% to $140.6 billion.
  • The spending boom has offered a leg of support to a stock market that is off course amid soaring inflation.
  • According to a Bank of America analysis, companies in the information-technology, communications-services, and industrials sectors have been the most significant contributors to capital-expenditure growth.
  • Some companies are tightening their belts amid potential recession fears. Intel Corporation INTC cut its capital spending forecast for 2022 after reporting a surprise quarterly loss and its biggest revenue decline in over a decade.

Posted In: BriefsM&ANewsBuybacksTechGeneral

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