Although they have become a common practice, share buybacks are a relatively recent phenomenon — only being introduced in 1982 under President Ronald Reagan.
The practice remains controversial, with critics claiming it fosters the misalignment of incentives, it has become a very popular maneuver among publicly traded companies.
While 2023 was a record year, with $1.2 trillion spent on stock buybacks, this year is set to be the fourth consecutive year in which more than $1 trillion will be spent this way. On the other hand, while the number of companies doing buybacks is smaller, the companies that are doing so are industry-leading titans.
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Finbold has compiled an overview of some of the largest share buybacks seen in the third quarter of 2024.
Share buybacks increase despite tax burden
The first quarter of 2024 saw an 8.1% increase in share buybacks compared to Q4 2023 — in spite of the fact that the Inflation Reduction Act (IRA) passed in 2022 imposed a 1% excise tax when doing so.
Tech giant Apple (NASDAQ: AAPL) is leading the charge, with $25 billion in shares repurchased in Q3 2024. While impressive, this figure is just one part of the business’s massive $110 billion buyback program — the largest in history. At press time, AAPL stock was trading at $224.18, with year-to-date (YTD) returns at 20.76%.
Fellow big tech behemoth Google (NASDAQ: GOOGL) bought back $15.30 billion in stock in the same period — this was likewise just one section of a larger plan which will see a total of $70 billion spent, in an effort to bolster shareholder returns together with the company’s first-ever dividend. At the time of writing, GOOGL shares were trading at $179.17, with YTD returns of 29.68%.
In third place, social media pioneer Meta Platforms (NASDAQ: META) repurchased $8.82 billion of its own shares. Just as in Google’s case, the brainchild of Mark Zuckerberg authorized a $50 billion buyback program, as well as its first-ever dividend in February. Meta stock is the best-performing of the bunch — at the time of publication, a single META share was worth $579.53, bringing YTD returns up to an impressive 67.36%.
The only entry in the list from the financial services sector, JPMorgan (NYSE: JPM), bought back roughly $6.36 billion in shares — having authorized a $30 billion repurchase plan in June. At press time, JPM shares were trading at $243.39, with YTD returns of 41.44%.
Finally, oil and gas giant ExxonMobil (NYSE: XOM) saw $5.51 billion in shares repurchased in the quarter ending on September 30. The company is on track to repurchase an additional $6 billion in XOM stock by the end of the year. At the time of publication on November 13, XOM stock was trading at $119.99, bringing YTD gains to 17.22% despite a year of generally choppy price action.
With megacap tech stocks posting record-breaking earnings, share buybacks are showing no signs of slowing down — Goldman Sachs is anticipating that the practice will see more than $1 trillion in spending in 2025 as well.
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