Jun 22, 2021 - Economy

Share buybacks are back at a record pace

S&P 500 share buybacks
Data: Compustat, Goldman Sachs Global Investment Research; Chart: Axios Visuals

The earnings environment is going so well for big companies that they're announcing new stock buyback plans at a record pace.

Why it matters: Last year, stock buyback activity fell sharply as companies were hanging onto cash amid extreme uncertainty. The about-face shows that confidence is up, along with earnings.

By the numbers: S&P 500 companies have approved plans for a whopping $567 billion worth of stock buybacks since the beginning of the year through mid-June, according to a new Goldman Sachs report. This is a record for this part of the year.

  • It’s worth noting that Apple and Alphabet accounted for $90 billion and $50 billion, respectively, of those announcements.
  • Goldman analysts expect companies to follow through with those approvals and execute $726 billion in buybacks this year, up 35% from $537 billion in 2020.

Context: This isn’t the only thing companies are spending money on. Capital expenditures, R&D and acquisitions are all expected to be above pre-pandemic levels.

The bottom line: Corporate cash flows are very strong right now. And business confidence is high enough that America’s biggest companies are happy to shovel cash to their shareholders.

Go deeper: Summer's expected IPO stampede likely to fuel record year

Go deeper