Sunday, September 19, 2021

Another fascinating dispatch today from the crack Calcbench research department, this time looking at the kingpins in share repurchase programs.

Share repurchase programs have been all the rage on Wall Street for years as a means to boost earning per share. We found, however, that the total amount of dollars spent on share buybacks is increasingly top-heavy — to the point that in 2020, only 10 firms in the S&P 500 accounted for half of all money spent on share buybacks.

Moreover, that top-heaviness in share buybacks has been increasing over time. The 10 biggest spenders in any given year are accounting for more and more of all money the S&P 500 spends on buybacks. See Table 1, below.

The 10 specific firms might vary from one year to the next, although several big names — looking at you, Apple ($AAPL) — do recur plenty of times. We ranked the top 10 for 2020, and they’re in Table 2, below.

Spending on share repurchases did decline in 2020 amid the pandemic’s economic uncertainty, but now seems to be rebounding briskly for 2021. That’s been driven by healthy corporate profits so far this year, and the Fed allowing more banks to resume spending on share repurchase programs.

Who will crack the Top 10 list for 2021? We’ll let you know in a few more months!


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