Freshly installed on every Moody's analyst's desk. Don't tempt them to use it.

Having already joined the chorus of thosewarning that activist hedge funds are ruining everything by insisting that all of that money belongs to shareholders, the ratings agency has got its eye out for anyone even thinking about boosting a dividend or buying back a few extra shares in hopes of keeping the activists at bay.

“Investment-grade U.S. companies are increasingly returning cash to shareholders, and have less free cash flow to repay debt today than they did before the recession,” said the report….

That lack of investment in future growth could slow the broader economy, which could create a cycle where companies’ earnings weaken and credit-quality measures, such as debt-to-Ebitda worsen, said Moody’s.

Moody’s: Shareholder Dividend Payments Hurting Bond Market [WSJ CFO Journal blog]