Stock buybacks in the Dow 30
Most of the companies in the Dow 30 have authorized more money for buying back stocks from their investors than they made in net income or spent on research and development last year. Of the 24 companies that announced stock buybacks in the past three years, 12 firms —mainly in tech and pharmaceuticals — list research and development spending in their public filings, an indication of their willingness to invest in innovation. Companies authorize stock buybacks to grow stock value for investors and increase a key metric that often helps set executive pay. Authorizations indicate the amount a company is willing to spend buying back stock within some number of years. In 2012, 79 percent of the amount cumulatively authorized for buybacks had been spent on repurchases. Read related article.
SOURCE: Birinyi Associates and S&P Capital IQ.