How strong is corporate America?

ON NORTH AMERICA

Despite the macro-economic headwinds, US corporations are in good shape to deliver attractive long-term returns for their shareholders.

Levels of debt are low; revenue streams have been diversified, through investment in new markets in the emerging economies; and dividends are growing. Companies in the financial sector – and banks in particular – still present too much risk and that has been underlined by the widening scope of the Libor-rigging investigations and the $5.8bn loss linked to a London trader at J.P. Morgan. In general terms, though, US companies are performing well and investing for the future. Profit estimates have been revised to more realistic levels and expenditure on new equipment and software in the...