Stocks throw off more cash than ever
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S&P 500 companies returned a record $1.6 trillion to shareholders in 2024, according to S&P Dow Jones Indices, three-fifths of which was in the form of buybacks.
Why it matters: The record amounts of cash being thrown off by U.S. stocks aren't just helping to support stock market valuations, they're also bolstering domestic consumption and international markets.
By the numbers: The $1.6 trillion returned to shareholders in 2024 represents a 14% increase from 2023.
- That's a much bigger raise than anything seen in the labor markets, allowing investors to pocket more income while also reinvesting a meaningful amount in hot markets like, say, Germany.
Between the lines: There's room for these numbers to grow even more.
- The $1.6 trillion works out to just 3.2% of S&P 500 earnings, down from 4.6% in 2022 and 6% in 2018.
How it works: As stocks repeatedly hit record highs in 2024, employee stock options became more and more in the money, and companies had to buy back stock to cover what they needed to pay out on the options they granted.
- That trend has continued in the first quarter of 2025, according to Howard Silverblatt of S&P DJI, with buybacks rising even while share prices have fallen.
Fun fact: Apple alone spent more than $100 billion on dividends and buybacks in 2024. (It was $104.2 billion, to be exact, up 24% from 2023.)
The bottom line: America's corporations may not be giving out aggressive raises any more, but they're still happily throwing billions of dollars at their shareholders.
