Over the last several years, stock buybacks have become a big part of how companies use their profits to help return capital to shareholders.
Plus, they can help boost earnings per share by reducing the number of outstanding shares.
In May, for example, Apple said it would buy back $110 billion of its stock – which helped catapult shares from $170 to $243.56. Plus, around that time, buybacks hit a high of $262 billion thanks to growing confidence in the economy and interest rate cut hopes.
“Companies have repurchased more than $383 billion in shares over the past 13 weeks, according to Deutsche Bank research reported by Yahoo. This marks a 30% increase from the same period last year and is the highest level since June 2018,” added Quartz.com.
Even better, thanks to record market high, buyback plans are surging again – which could be great news for investors in stocks such as:
Southwest Airlines (SYM: LUV)
Southwest Airlines (LUV) just gapped higher after announcing it will launch a $750 million buyback program in the first quarter of the new year. That follows the $250 million accelerated buyback program launched in October.
Plus, “[Southwest] is encouraged by recent revenue trends and forward bookings, including fourth quarter holiday travel, and currently expects strong revenue trends and tactical initiative performance to carry into 2025,” the company said in a filing with the U.S. Securities and Exchange Commission.
AT&T (SYM: T)
AT&T is pushing higher on news it will return more than $40 billion to shareholders with dividends and buybacks over the next three years, while forecasting more than $18 billion in free cash flow in 2027.
The company “further expects improved financial performance to support $40 billion+ of anticipated shareholder returns through dividends and share repurchases over the next three years, including an initial share repurchase authorization of $10B that management expects to complete by the end of 2026,” as noted by Seeking Alpha.
Himax Technologies (SYM: HIMX)
HIMX also gapped higher on news it will buy back $20 million worth of stock. “This initiative reflects confidence in Himax’s market leadership and growth prospects across sectors like automotive and AI. The company continues to strategically invest in high-growth areas while maintaining a diversified portfolio to capitalize on market opportunities,” noted TipRanks.com.
