Comcast Corporation (CMCSA), The Walt Disney Company (DIS), Time Warner Inc (TWX): Will The Dividend And Buyback Frenzy Continue?

While many companies have been pumping up their cash balances, some of them have also largely avoided taking on any debt. But with stable cash flows and a stable economy, the time may be right to attain a higher level of debt leverage, which brings tax benefits, and could also fuel hefty buybacks and dividends. Here’s a short list of major firms that have fairly low debt-to-capitalization ratios.

1). Occidental Petroleum Corporation (NYSE:OXY): 16%
2). Visa Inc (NYSE:V): 0%
3). Public Storage (NYSE:PSA): 5%
4). T. Rowe Price Group, Inc. (NASDAQ:TROW): 0%
5). Mastercard Inc (NYSE:MA): 0%

Risks to Consider: Companies are buying back huge sums of stock even after the stock market has delivered huge gains. A sharp market pullback would lead to complaints that the high level of buybacks were done at the wrong time.

Action to Take –> Barring any sort of cataclysmic global economic meltdown, major U.S. companies are now laden with a sufficient amount of cash. In the years ahead, look for these shareholder return efforts to persist or even strengthen. That’s why it pays to assess any stock on your radar in terms of its potential to return cash back to shareholders.

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– David Sterman

Warren Buffett’s Top 5 Stocks

Buffett’s firm, Berkshire Hathaway, holds dozens of stocks. But these five make up 75% of its portfolio… worth $65 billion. Click here to get Buffett’s top 5 stocks plus his 16 latest buys, FREE.