Why stock pickers should favor companies that invest, rather than reward shareholders

Companies that invest in capital expenditures have seen better performance over the past yearMCA/Courtesy Everett CollectionA better reward for shareholders than buybacks is spending for the future, according to Goldman. Many U.S. companies are increasingly focusing on rewarding their shareholders through cash-return programs. Fueled by the recently passed tax bill, which gave an influx to the already massive piles of cash that companies had on hand, companies have been accelerating their stock-buyback programs and raising dividend payments to record levels.

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