Investors weighing a shift into dividend stocks may be better off focusing on companies with big share buyback programs instead, according to Bank of America.
The idea behind focusing on stock buybacks is that companies that can use excess cash to reduce their share count through buybacks are likely on strong financial footing.
This is more of a pure-play buyback fund, tracking the Nasdaq US Buyback Achievers Index.
To be sure, stock buybacks are a frequent target of politicians and their tax treatment could change in the years ahead.
President Joe Biden called for raising the corporate tax rate for stock buybacks at his State of the Union address last week.
Persons:
Jared Woodard, Woodard, PKW, Joe Biden
Organizations:
Bank of America, Bank of America's, Bank of, Nasdaq, Union
Locations:
buybacks