S&P 500 Companies Pile On Debt Amid Low Rates

There is currently $1.7 trillion of cash on S&P 500 non-financial balance sheets and, according to a new research note from Bank of America, how corporate’s plan to spend this cash should feature heavily in investors’ minds going forward. In Bank of America’s third annual S&P 500 Corporate Cash Primer, which was published on May 19 the bank’s analysts conclude that managements' preference for stock buybacks is now declining and has been replaced by a growing love of dividends.

• A "weird" Market

Indeed, according to the report, while CapEx has historically been the biggest use of cash (even amid the recent commodity recession), dividends are now the second largest, eclipsing net buybacks for the...