Corporations and investors have cheered the recent Republican tax overhaul.
And there’s plenty to cheer about. The lower overall tax rate and repatriation discounts mean that there will be plenty of extra cash sloshing around a company’s balance sheets. That’s led to a huge increase in buyback and dividend activity.
For most investors, the focus on playing the tax plan has enabled the largest multinationals to take advantage of repatriation of overseas cash. But that might not be the best way to cash in.
It turns out that the smaller, domestically-focused stocks are going to be the longer-term winners when it comes to profit and dividend growth stemming from the tax plan. To get the most out of the tax plan, thinking small could be the best bet for investors.