Biotech Values

[zipjet]

I wonder how many other share-holder friendly companies with plenty of cash might do the same, either before or after the election, but before 12/31 in any event.

It is poor management to pay high levels of taxable* dividends if the tax rates jump.

It is much better stewardship of the stockholders money to shift to stock buybacks. Companies with long records of unbroken distributions can cut to tiny dividends to retain the record.

My guess is we will see half of companies adjust their payout strategy if the taxation of dividends changes and looks like it sticks.

ij

* RIC/REIT/MLP distributions that are fully taxed already will not be cut. The IDT example is a bit odd since it is described as a return of capital which is thus not taxed. It may be that if the same sums were distributed in 2013 that they would be taxable dividends and not return of capital.