Factbox-US stock buybacks so far in 2023: big money, fewer companies

NEW YORK (Reuters) – Corporate stock buybacks are offering investors a measure of excitement in a dismal earnings season.

Chevron Corp announced late last month that it would triple its share buyback budget to $75 billion.

The oil major’s announcement was followed last week by Meta Platforms Inc, Facebook’s parent company, which announced a $40 billion buyback last week.

Buoyed by these announcements, corporate buybacks are on track to start 2023 stronger in dollar terms than a year ago — although fewer companies are announcing them. Here’s a closer look at buyback trends:

** Companies have announced planned buybacks worth $173.5 billion so far this year, a little more than double the pace of last year, according to data from EPFR TrimTabs on Monday. In 2022, buyback announcements hit a record $1.22 trillion, according to EPFR TrimTabs.

** However, fewer companies have announced buybacks so far this year. So far in 2023, 78 companies have announced buybacks, compared to 125 companies at this point last year, according to EPFR TrimTabs, which tracks announcements from companies listed on the New York Stock Exchange, the Nasdaq and the American Stock Exchange.

** S&P 500 companies are said to have made $220 billion in buybacks in the fourth quarter of 2022, according to S&P Dow Jones indices. That’s up from $210.8 billion in the third quarter but down from $270 billion in the fourth quarter of 2021.

** 2023 should be the first year of completed buybacks of S&P 500 companies worth at least $1 trillion, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

** According to Credit Suisse data on Friday, buybacks contributed 3.7% to S&P 500 earnings per share in the fourth quarter. Overall, gains for the S&P 500 fell 2.1% in the quarter ended Friday, according to Credit Suisse.

** The S&P 500 buyback index, which is designed to measure the performance of stocks with the highest buyback rates, was up 8.9% in 2023 on Friday versus a 7.7% gain for the broad S&P 500 during that time. The buyback index fell 12.7% in 2022 versus a 19.4% decline for the entire S&P 500.

(Reporting by Lewis Krauskopf; Editing by Jonathan Oatis)

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