Here are the 10 companies with the highest cumulative subsidy dollars received: Company Subsidy Value Number of Subsidies Boeing $13,174,075,797 137 Alcoa $5,635,305,059 91 Intel $3,867,492,085 58 General Motors $3,494,237,703 307 Ford $2,522,304,454 173 Fiat $2,060,988,039 93 Royal Dutch Shell $2,038,202,298 66 Nike $2,024,582,002 23 Nissan $1,799,585,041 25 Cerner $1,732,784,334 15 Source: Good Jobs First. These 10 companies all tallied greater than $1.7 billion in cumulative subsidies. All told, according to Good Jobs Firsts data, 17 companies brought in more than $1 billion in subsidies and 182 hit the $100 million mark. Furthermore, there can be a very wide variance in terms of total subsidies issued. The Mayo Clinic, a non-profit medical care and research group, received a single $585 million subsidy according to the Good Jobs Firsts data. By comparison, chemical products supplier Dow Chemical has received more than 400 separate state and local subsidies on its way to $1.4 billion in cumulative subsidy value. Now lets have a closer look at what similarities might be apparent in the data above which may make you a smarter investor. Select trends emerge Perhaps the most notable trend that emerges from the data above is just how lopsided state and local government handouts are toward the industrial and energy sector. With the exception of health care information technology systems developer Cerner (NASDAQ: CERN ) , which has benefited in a big way from the rollout of Obamacare, the remaining nine companies are all manufacturing based. In fact, expanding this list above through No. 13 would yield three additional manufacturing companies. Source: Boeing, The point here is clear -- state and local government will incentivize large corporations to stay within their state or region in order to stabilize the local job market. Boeing (NYSE: BA ) , for example, received the largest corporate tax break a state has ever dished out in November from Washington in an effort to keep the build-out of its next-generation 777 within the Puget Sound region. Boeing has received hefty subsidies from South Carolina as well. Automakers are also a big source of corporate subsidies, with Ford (NYSE: F ) , General Motors (NYSE: GM ) , Fiat, and Nissan among the top nine. Expanding the list a bit further, and youll find Toyota at No. 16, Volkswagen at No. 22, Hyundai at No. 24, and Daimler at No. 32. The draw for state and local governments to incentivize automakers is twofold. First, select subsidies encourage domestic automakers such as Ford and GM to produce next-generation electric and electric-hybrid vehicles. These vehicles reduce or eliminate carbon dioxide emissions and are better for the environment. Source: Ford. Also, these subsidies help keep American jobs in America instead of outsourcing them to lower-cost labor regions of the world such as China or India. Labor unions generally do a good job of protecting workers rights in the auto industry, but these subsidies are also a strong draw for Ford and GM to continue producing American cars, and perhaps even cars that will wind up in foreign countries, within the United States. Finally, its worth noting is that foreign companies fare just as well as large domestic U.S.-based businesses in drawing government subsidies. Three of the top nine businesses in terms of cumulative subsidy dollars – Fiat, Royal Dutch Shell, and Nissan – are foreign companies. As I noted above, automakers are among the most courted companies by state and local governments through incentives. Nissan, for example, received $1.25 billion via multiple subsidies from the state of Mississippi in 2000 to construct an auto assembly plant in an effort to create and/or save 4,000 jobs. However, energy companies like Royal Dutch Shell (NYSE: RDS-A ) are also on the receiving end of bountiful handouts as well. In 2012, Pennsylvania awarded Royal Dutch Shell $1.65 billion worth of tax credits for the construction of an ethane cracker plant within the state. How this helps you Companies which are clearly adept at seeking out incentives are much more likely to be able to keep more of their hard-earned income as these subsidies often take the form of a multi-year tax break. Lower effective taxes within a state can allow for more research and development as well as hiring, which can lead to even faster growth for these companies. In other words, seeking out companies with large subsidies is another way of giving yourself an edge over the uninformed investor. Keep in mind that a large subsidy alone is no guarantee of a companies success, but it often translates into lower taxes and higher profits. Top dividend stocks for the next decade The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That’s beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor’s portfolio. To see our free report on these stocks, just click here now. Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
Posted on: Wed, 03 Dec 2014 07:02:21 +0000
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