Buyback

2022: Global share buyback programs rise to record $1.31 trillion

At the end of 2022, companies globally implemented buyback programs totaling approximately $1.31 trillion, which is a new record. Such data are given in the study by Janus Henderson, the results of which were released on May 10, 2023.

According to MarketWatch, the presented report takes into account data on 1200 leading companies in the world. Compared to 2021, the amount of redemption of securities increased by 22% and approached the total amount of dividends paid, which in 2022 was at the level of $1.39 trillion.

The amount of securities repurchase increased by 22% and approached the total amount of dividends paid

The largest contribution to the observed growth was made by the oil sector, in which companies in 2022 bought out their own shares for $135 billion. This is more than four times the amount spent a year earlier. The corresponding segment is dominated by enterprises from North America and Britain. In addition, European states make a significant contribution.

The rapid growth in buybacks over the past three years [by the end of 2022] reflects strong earnings and free cash flow, as well as a willingness to reward shareholders without creating unwanted expectations for dividends, said Ben Lofthouse, head of securities turnover at Janus Henderson.

It is noted that the global volume of share buyback programs increased by 182% from 2012 to 2022. The amount of dividends paid over the same period rose by about 54%. Growth is observed in almost all countries and in almost all sectors. The biggest jump came as U.S. tech companies ramped up stock buyback programs in 2018. In 2012, share buybacks accounted for 52% of the dividend, and by the end of 2022 this figure reached 94%.^[1]

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