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Oil storage cans.

News

Big Oil's Big Spending Boom

Aaron Levitt Mar 21, 2018


One of the biggest criticisms of the Republican tax plan is that the reduction in corporate taxes isn’t doing anything to spur business or economic growth.

Most firms – from tech to consumer products – have actually been returning the funds to shareholders, rather than using the saved money to open plants, hire workers or buy equipment. The big jump in buyback and dividend activity since the plan was made law underscores this criticism.

The one exception to the trend – big oil.

It turns out that the energy sector is the one place where firms are using their corporate windfall to expand. And that’s great news for investors over the longer haul. The rise in CAPEX spending should ultimately help return the sector to its former dividend growth once again.

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