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February was the Strongest Month Ever for Stock Buybacks

February was the Strongest Month Ever for Stock Buybacks

We are believers in a concept called Shareholder Yield.  It is a number that tries to accurately capture how much cash is being returned to investors by a company.  To do that, you simply combine the dividend yield with stock buybacks.  Companies who are returning a lot of cash to investors are essentially providing them with a higher “yield”.  As Birinyi Associates point out in the chart below, buybacks are at an all-time high.  This is good for investors.

From Birinyi via the Financial Times:

“There were $118 billion of buyback authorizations in February, a 48% increase versus February of 2014 ($80 bln).

February was the strongest month ever and 2015 was the strongest start to the year ever with $152 billion of authorizations recorded year-to-date. We recorded 139 authorizations, which was virtually even with the same period in 2014 (141).

Based on the data recorded YTD, we are at a run -rate to total $914 bln of announced buybacks in 2015, which would be the largest of all-time (2007 = $863 bln, 2013 = $755 bln, 2006 = $657 bln).”

For more on shareholder yield, see the original paper from William Priest at Epoch Partners in the link below.