Fund Managers Demanding Higher Dividends

Fund managers have a message for the boards of public companies, and it's straight out of Jerry Maguire: Show me the money!

More than half the world's professional money managers are now pushing public companies to ramp up their dividend payouts, according to a new survey from Merrill Lynch(MER Quote - Cramer on MER - Stock Picks). They even want those companies to borrow the cash, if necessary, to do it.

By the numbers: 53% surveyed in January want companies to give back more cash to shareholders, up sharply from just 44% a month ago. Those who would rather see companies invest that cash in growing their businesses dropped by the same amount.

Merrill's monthly survey is the best and most comprehensive of its kind, including more than 200 money managers from around the globe. And this looks like the must-know insight from the latest 30-page report.

The reason?

Three and a half years of profit growth have left a lot of companies on the stock market, here and overseas, awash with cash. They've been raising their dividends, but profits have been rising a lot faster.

And for U.S. investors, there's a kicker. The tax cut a few years ago makes dividends more attractive, because now you just pay up to 15% tax on them.

It's a subject close to the heart of Eaton Vance(EV Quote - Cramer on EV - Stock Picks) fund manager Judy Saryan, who sits in a sunny office overlooking Boston harbor and scours the world for companies likely to send their shareholders bigger checks. "There are lots of good dividend growth stories out there, some right here in the U.S. and some in Europe," she says. "A lot of them are large-cap companies, because they tend to have a lot of cash and they tend to be a little less leveraged."

« Previous Page

1 2

Next Page »