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Sitting on $1 trillion in cash and emerging from years of caution, European companies are now showing the strongest year-on-year growth in capital spending plans in the world.Year-on-year capex growth for European companies is currently about 3 percent, easily outpacing other major regions globally.In a recent report, credit ratings agency Moody's found that EMEA companies' cash pile rose to nearly 1 trillion euros at the end of 2016, with the ratio of cash to revenues at a seven-year high.Till last year, when the growth outlook for Europe was at best murky, investors were loathe to reward expansion plans and instead favored companies that paid out earnings in dividends or buybacks."CEOs have become very addicted to the buyback phenomenon and I think almost by definition that needs to fade a little bit, because CEOs aren't going to get the same bang for their buck," Lafferty added.European shares trade at around 15.2 times forward earnings, above their 30-year average of 14 times, according to Thomson Reuters data.
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