Stock buybacks are one of the most significant ways companies return value to shareholders. As we head into 2025, buybacks could play an even larger role in the stock market, particularly for companies with strong cash flow. In this article, we’ll break down which companies are leading in buybacks and how they impact investors like you.
Why Stock Buybacks Matter
Stock buybacks, or share repurchase programs, allow companies to buy back their own shares from the market. This reduces the number of outstanding shares, which can help increase earnings per share (EPS) and potentially boost stock prices.
While 2024 saw explosive growth for major market players like Apple, Alphabet, and Nvidia, 2025 is shaping up to be a different story. With growth rates expected to slow, buybacks could become a key strategy for companies to sustain shareholder value.
The Biggest Stock Buyback Spenders of 2024
Using Q3 2024 data, let’s look at some of the S&P 500 companies that led in buyback spending:
- Apple – Over $50 billion spent
- Alphabet – Around $30 billion
- Nvidia, Meta, JP Morgan, Visa, Exxon, Chevron, Microsoft, and Bank of America also made significant buybacks.
The Real Impact of Buybacks
The total dollar amount spent on buybacks is only part of the story. A more important factor is how much the number of outstanding shares actually decreases. This percentage directly affects EPS and shareholder value.
Here’s how buybacks affected share counts for some of these major companies:
- Apple
- Shares outstanding in September 2024: 15.48 billion
- Shares outstanding in December 2024: 15.30 billion
- Percentage of shares repurchased: 0.69%
- EPS impact: +$0.04 per share
- Alphabet
- Shares outstanding in January 2024: 12.72 billion
- Shares outstanding in December 2024: 12.44 billion
- Percentage of shares repurchased: 2.16%
- EPS impact: +$0.17 per share
- Nvidia
- Shares outstanding in January 2024: 24.94 billion
- Shares outstanding in December 2024: 24.86 billion
- Percentage of shares repurchased: 0.31%
- EPS impact: +$0.01 per share
- Meta
- Shares outstanding in December 2023: 2.629 billion
- Shares outstanding in December 2024: 2.614 billion
- Percentage of shares repurchased: 0.57%
- EPS impact: +$0.14 per share
Backwards Buybacks?
Interestingly, not all companies that announced buyback plans ended up reducing their share count. ExxonMobil actually increased its outstanding shares by 6%, meaning instead of reducing dilution, they added more shares to the market—an unusual move for a company expected to lead in buybacks. This increased share count likely had a negative impact on EPS by around -$0.48 per share.
The Best Value Buyback Programs
To determine which companies delivered the most value through buybacks, we compared the percentage of shares repurchased to EPS growth. The results:
- JP Morgan Chase topped the list, delivering +$0.43 per share in EPS through buybacks.
- PayPal followed with +$0.25 per share, despite having a lower overall EPS.
- Alphabet (Google) delivered +$0.17 per share, showing a strong buyback effect.
What This Means for 2025
Buybacks are an essential factor when evaluating stocks for 2025. While companies like Apple and Alphabet spend billions, their high share count means the per-share impact is smaller. On the other hand, companies with a lower number of shares can see a bigger EPS boost from buybacks.
If you're an investor looking for buyback-driven growth, focus on:
- Companies with large buyback budgets – Apple and Alphabet continue to dominate.
- Companies with meaningful share reductions – PayPal, JP Morgan, and Meta stand out.
- Avoid companies increasing share count – Exxon’s move in 2024 may raise red flags.
Final Thoughts
Stock buybacks can be a powerful tool for increasing shareholder value, but not all buybacks are created equal. Understanding the percentage impact on share count and EPS will help you make smarter investment decisions in 2025.
Let me know in the comments which buyback programs you think will be the most valuable this year. And if you're looking for more detailed stock analysis, check out Seeking Alpha Premium and get a free trial and discount on your first year.