Capital Allocation: The Superpower of (Some) Public Companies

Motley Fool Hidden Gems Investing

The Motley Fool

Business, Investing

4.3 • 3.1K Ratings

🗓️ 14 May 2022

⏱️ 28 minutes

🔗️ Recording | iTunes | RSS

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Summary

After a company pays its expenses, it has some decisions to make – pay a dividend, buy back stock, make an acquisition, or just hold on to the money. That's capital allocation, and not every company does it well. Motley Fool senior analysts Bill Mann, John Rotonti, and Auri Hughes discuss six companies handling capital allocation in a Foolish way, including: - How a stock with a slow-growing top-line can become a long-term compounder - One company that was built to make acquisitions - When it’s a “crime” for a company to pay a dividend - How to water-proof your shoes Stocks discussed: CSU, CNSWF, BRK.A, BRK.B, ACN, WDFC, TXN, ADYEY, MQ, CHD, HD Bonus resource - https://www.fool.com/investing/2016/09/07/interview-with-broad-run-investment-management.aspx Host: John Rotonti Guests: Bill Mann, Auri Hughes Producer: Ricky Mulvey Engineers: Rick Engdahl, Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is why capital allocators, the superior capital allocators tend to generate excellent
0:08.2	long-term returns.
0:09.9	They're hiring.
0:10.9	They're hiring at a point in time in which their competitors are static or letting people
0:17.6	go or are retrenching.
0:20.0	These are the times in which the winners are made in the market.
0:24.0	It's not times in which capital as cheap as can be.
0:27.7	The times in which capital is dear.
0:35.6	I'm Chris Hill and that was Motley Fool's Senior Analyst Bill Mann.
0:39.6	How good a company is at handling its cash says a lot.
0:43.7	Do they pay a dividend?
0:44.9	Buy back stock?
0:46.1	Make an acquisition?
0:47.3	Or maybe just hold on to the money?
0:49.6	These are decisions that long-term investors pay close attention to.
0:53.2	Today, Bill joins fellow analysts Ari Hughes and John Rotanti to talk about six companies
1:00.4	handling capital allocation in ways we like to see.
1:08.6	Hi Fool's, I'm John Rotanti.
1:10.5	I'm joined by Ari Hughes and Bill Mann.
1:14.1	We are talking capital allocation and we're going to share with you some of the companies that we
1:19.8	think excel at capital allocation before I ask Ari for his first pick.
1:25.0	I just want to quickly go through what we mean by capital allocation.
	...

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