U.S. Share Buybacks and Dividends Over the past 20 years, U.S. corporates have clearly favored buybacks over dividends, reflecting a shift towards prioritizing shareholder value through capital appreciation rather than regular income distributions. Image: BofA Global Research
S&P 500 Share Buybacks $7.6 trillion of S&P 500 share buybacks over the last 10 years. While buybacks can benefit shareholders, critics argue that funds could have been better spent on research, development, and employee wages. Image: Goldman Sachs Global Investment Research
Gross Share Buyback Announcements The strength of share buyback announcements reflect companies’ confidence in their financial stability and commitment to enhancing shareholder value. Image: J.P. Morgan
S&P 500 Weekly Announced Buybacks U.S. share buyback announcements are robust during this earnings season, reflecting companies’ confidence in their financial positions and their dedication to delivering value to shareholders. Image: Deutsche Bank Asset Allocation
S&P 500 Buybacks vs. CEO Confidence (Leading Indicator) S&P 500 buybacks are likely to rebound, as CEO confidence typically leads buybacks by 6 months. Image: Morgan Stanley Research
S&P 500 EPS Growth vs. Buyback Growth While EPS growth may be one factor influencing a company’s decision to repurchase its own shares, it is just one of many potential drivers of buyback activity. Image: Goldman Sachs Global Investment Research
S&P 500 Buybacks Investors generally consider the persistent robustness of S&P 500 buybacks as a positive sign, as they have the potential to create sustainable value for shareholders. Image: Deutsche Bank Asset Allocation
Buybacks and S&P 500 Use of Cash Stock buybacks are just one potential use of cash by S&P 500 companies. Companies may choose to engage in buybacks to return cash to shareholders, and potentially enhance shareholder value. Image: Goldman Sachs Global Investment Research
Buybacks – Share of S&P 1500 Companies Paying a Dividend or Repurchasing Stock Over the years, the share of S&P 1500 companies engaging in share repurchases has surged. In 1995, only 3% participated, while in 2023, it reached 70%, greatly enhancing shareholder returns. Image: Goldman Sachs Global Investment Research
S&P 500 Earnings and Gross Buybacks Share buybacks will play a significant role in 2024, as they are set to accelerate once again amidst the ongoing improvement in corporate earnings. Image: Deutsche Bank Asset Allocation
S&P 500 Gross Buybacks to Earnings Ratio It is possible that share buybacks will increase substantially in 2024, if the ratio of S&P 500 gross buybacks to earnings rises to the historical average. Image: Deutsche Bank Asset Allocation