We have witnessed many cash distribution back to shareholder after disposal of subsidary or other assets. Is it a good sign?
Well, you can argue that the management has no other uses for the excess cash. Therefore it is returing to shareholder. As a shareholder, u will want the board to reinvest the cash to reap more profit for the company. But we got to bear in mind, whether the company has enough resourses to reinvest, and the market condition then.
However, usually companies return excess cash to shareholders to "beautify" their financial ratio. Their ROE will be higher, as there is lesser cash in the companies' book and there are other indicators too.
It really depends on how you look at it. One may view it as a reward to shareholder, and deemed that a return of excess cash is logical since they are also part of the company.
Below is a list of companies returning cash back to shareholder:
1) Integra2000 : $0.12 cash to shareholder
2) Jacks International: Proposed $0.105
3) Total Auto: Proposed $0.53-$0.55
Well, you can argue that the management has no other uses for the excess cash. Therefore it is returing to shareholder. As a shareholder, u will want the board to reinvest the cash to reap more profit for the company. But we got to bear in mind, whether the company has enough resourses to reinvest, and the market condition then.
However, usually companies return excess cash to shareholders to "beautify" their financial ratio. Their ROE will be higher, as there is lesser cash in the companies' book and there are other indicators too.
It really depends on how you look at it. One may view it as a reward to shareholder, and deemed that a return of excess cash is logical since they are also part of the company.
Below is a list of companies returning cash back to shareholder:
1) Integra2000 : $0.12 cash to shareholder
2) Jacks International: Proposed $0.105
3) Total Auto: Proposed $0.53-$0.55
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