Large-scale purchases: billions spent on repurchases in these equities
In the global business landscape, companies are leveraging share buyback programs to return value to shareholders and boost their stock prices. This trend is particularly prevalent in both the S&P 500 and DAX indices, with American companies projected to outspend their European counterparts in 2025.
Companies such as Shell, BP, and Totalenergies have collectively spent a staggering $40 billion on buying back their own shares over the past 12 months. Similarly, tech giants like Apple have invested $91 billion and $110 billion, respectively, in their own shares. These repurchases reduce the number of outstanding shares, thereby increasing earnings per share and potentially raising the stock price.
In the U.S., share buybacks are more valued than dividends, with less than $711 billion expected to be distributed in dividends in the S&P 500 next year compared to buyback spending. This trend is not exclusive to the tech sector, as Alphabet, Meta, Nvidia, and Microsoft have collectively bought back $120 billion worth of their own shares.
European companies are also participating in this trend, albeit on a smaller scale. For instance, RELX announced a buyback of £425 million in 2025. However, the U.S. market, with its greater liquidity and emphasis on capital return through share repurchases, generally surpasses European levels.
Mercedes-Benz Group, for example, is spending around €5 million daily on buying back its own shares, with more than a quarter of its total budget allocated for stock repurchases. Similarly, Munich Re has taken more than 40% of its shares off the market since 2006, with an average buyback price of 163 euros per share.
It's crucial that a company only spends money on repurchases if all necessary investments are financed and debt levels are normal. This ensures the long-term health and sustainability of the company. In fact, research indicates that shares of companies that engage in buybacks have performed better than the broader U.S. market in the long run.
However, it's important to note that companies should exercise caution when engaging in buyback programs, particularly during boom phases when profits and the stock price are high. This can lead to problems in the next crisis.
Repurchases are often used in conjunction with dividends as a means to involve shareholders in the company's economic success. Companies like SAP and Wells Fargo have planned significant buyback programs, with SAP aiming to invest up to €5 billion in its own shares by the end of 2025.
In conclusion, share buyback programs are a powerful tool for companies to return value to shareholders and boost their stock prices. While the U.S. market is expected to outspend Europe in 2025, both markets offer opportunities for companies to engage in these programs and benefit their shareholders.
Companies like SAP and Wells Fargo have planned significant investing efforts, aiming to invest up to €5 billion and billions, respectively, in their own shares through share buyback programs. This financing strategy can potentially raise their stock prices (business).
The trend of companies buying back their own shares is not limited to the tech sector, as firms across various industries, such as Shell, BP, Totalenergies, Apple, Alphabet, Meta, Nvidia, Microsoft, and even European companies like RELX and Mercedes-Benz Group, have participated in this practice (investing).
