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WAM boss urges cashed-up ASX 200 companies to buy, invest or pay dividends

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The founder and boss of Wilson Asset Management, Geoff Wilson, has told S&P/ASX 200 Index (ASX: XJO) companies to put the cash they’re sitting on to good use.

Plenty of businesses have seen strong profit and cash flow since the onset of COVID-19.

However, the pandemic has also caused interest rates to sink to almost 0%, with the Reserve Bank of Australia (RBA) in no rush to raise interest rates back to ‘normal’ levels.

Would it be a good idea for businesses to keep their cash in the bank in this environment? According to reporting by The Age, Geoff Wilson said:

The current return on cash, as anyone who has any cash in the bank knows, is close to zero. They’re better off handing it back to shareholders as fully franked dividends, or investing in their business or buying other businesses.

Big shareholder returns

There have been significant shareholder return announcements over the last year from ASX 200 shares.

For example, each of the big four ASX banks of Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) announced share buy-backs last year.

The mining giants of Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) both announced very large dividends in reporting season last month.

Wesfarmers Ltd (ASX: WES) recently completed a $2.3 billion capital return, returning $2 per share.

Acquisitions

There has been plenty of corporate activity by ASX 200 shares in recent months as well.

Buy now, pay later business Zip Co Ltd (ASX: Z1P) has launched a takeover attempt to buy Sezzle Inc (ASX: SZL).

Woodside Petroleum Limited (ASX: WPL) is on course to buy BHP’s petroleum business, though this is an all-share deal.

Telstra Corporation Ltd (ASX: TLS) has bought Digicel Pacific and MedicalDirector.

Sonic Healthcare Ltd (ASX: SHL) has made a number of smaller acquisitions with its COVID testing cash flow.

Hub24 Ltd (ASX: HUB) has acquired SMSF accounting business Class.

Fortescue Metals Group Ltd (ASX: FMG) recently bought the battery business Williams Advanced Engineering.

As you can see, there have been plenty of ASX shares that have decided to go for an acquisition or two.

What are some of the ASX shares that WAM likes right now?

The flagship investment vehicle that Wilson Asset Management runs is the listed investment company (LIC) WAM Capital Limited (ASX: WAM).

Each month, WAM Capital reveals its top 20 holdings. At 31 January 2022, these were some of those top 20 holdings:

Aristocrat Leisure Limited (ASX: ALL), ARB Corporation Limited (ASX: ARB), Brickworks Limited (ASX: BKW), Carsales.com Ltd (ASX: CAR), PEXA Group Ltd (ASX: PXA) and TPG Telecom Ltd (ASX: TPG).

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