Almost 100 American corporations have trumpeted such plans in the past month. American companies have announced more than $178 billion in planned buybacks — the largest amount unveiled in a single quarter, according to Birinyi Associates, a market research firm.
Those so-called buybacks are good for shareholders, including the senior executives who tend to be big owners of their companies’ stock. A company purchasing its own shares is a time-tested way to bolster its stock price.
Cisco said this month that in response to the tax package, it would bring back to the United States $67 billion of overseas cash, using $25 billion to finance additional share repurchases. Alphabet, the parent company of Google, authorized up to $8.6 billion in stock purchases. PepsiCo announced a fresh $15 billion in planned buybacks. Chip gear maker Applied Materials disclosed plans for a $6 billion program to buy shares. Late last month, home improvement retailer Lowe’s unveiled plans for $5 billion in purchases.
UBS analysts covering Apple said the iPhone maker might authorize another $30 billion in share purchases when it reports its next quarterly earnings in April. That would be on top of the $30 billion it already spends each year to buy back its shares.
“I’m expecting buybacks to get to a record for 2018,” said Howard Silverblatt, a senior index analyst with S.&P. Dow Jones Indices. “And if I’m disappointed, there’s a lot of people with me.”
The flurry of planned buybacks has been good for the stock market. Early this month, stocks were down more than 10 percent from their January peak. The prospect of companies flooding markets with “buy” orders helped the market recoup some of its losses.
https://www.nytimes.com/2018/02/26/...column-region®ion=top-news&WT.nav=top-news
Companies typically decide to make long-term investments in things like new workers and factories based on whether they will make the company more profitable — not merely because the companies are sitting on a pile of money that they otherwise would have paid in taxes.
At a news conference Thursday, the head of the White House’s Council of Economic Advisers, Kevin Hassett, acknowledged that many companies were spending their money on buying their own shares.
“Right now we’re going to have an adjustment where you see probably more dividends and share buybacks than wage increases,” Mr. Hassett said.
Those so-called buybacks are good for shareholders, including the senior executives who tend to be big owners of their companies’ stock. A company purchasing its own shares is a time-tested way to bolster its stock price.
Cisco said this month that in response to the tax package, it would bring back to the United States $67 billion of overseas cash, using $25 billion to finance additional share repurchases. Alphabet, the parent company of Google, authorized up to $8.6 billion in stock purchases. PepsiCo announced a fresh $15 billion in planned buybacks. Chip gear maker Applied Materials disclosed plans for a $6 billion program to buy shares. Late last month, home improvement retailer Lowe’s unveiled plans for $5 billion in purchases.
UBS analysts covering Apple said the iPhone maker might authorize another $30 billion in share purchases when it reports its next quarterly earnings in April. That would be on top of the $30 billion it already spends each year to buy back its shares.
“I’m expecting buybacks to get to a record for 2018,” said Howard Silverblatt, a senior index analyst with S.&P. Dow Jones Indices. “And if I’m disappointed, there’s a lot of people with me.”
The flurry of planned buybacks has been good for the stock market. Early this month, stocks were down more than 10 percent from their January peak. The prospect of companies flooding markets with “buy” orders helped the market recoup some of its losses.
https://www.nytimes.com/2018/02/26/...column-region®ion=top-news&WT.nav=top-news
Companies typically decide to make long-term investments in things like new workers and factories based on whether they will make the company more profitable — not merely because the companies are sitting on a pile of money that they otherwise would have paid in taxes.
At a news conference Thursday, the head of the White House’s Council of Economic Advisers, Kevin Hassett, acknowledged that many companies were spending their money on buying their own shares.
“Right now we’re going to have an adjustment where you see probably more dividends and share buybacks than wage increases,” Mr. Hassett said.
