Billions in Buybacks: 4 Stocks Rewarding Shareholders Now These stocks are looking to return varying amounts of capital to shareholders using buybacks. One fintech's buyback capacity is equal to 25% of its market cap.
By Leo Miller
This story originally appeared on MarketBeat
These four large-cap stocks recently announced buyback programs that are moderate to massive in size when compared to their market capitalizations. I’ll break down these new programs, as well as other important developments around these firms looking to return capital back to shareholders. All market capitalization figures are as of the Feb. 5 close.
Regeneron Pharmaceuticals: Solid Buyback Capacity, Dips Toes Into Investment Income
Regeneron Pharmaceuticals (NASDAQ: REGN) just posted strong results in its full-year 2024 earnings release and the initiation of a moderately sized buyback program. The program comes in at $3 billion. When added to the company’s still remaining buyback authorization, its total buyback capacity comes in at $4.5 billion, or 6% of its market capitalization. Regeneron is not only starting a buyback program but also paying shareholders investment income.
The firm announced the initiation of a quarterly cash dividend program. The first payment will come in at $0.88 on Mar. 20 to shareholders of record as of Feb. 20. This gives the company an indicated dividend yield of around 0.5%. Although it's nothing to write home about, anything is an improvement over 0%. Regeneron shares rose nearly 5% after earnings with beats on both revenue and adjusted earnings per share (EPS).
PayPal: Big-Time Buyback Authorization Announced
When it comes to buyback program announcements, PayPal’s (NASDAQ: PYPL) is massive. The firm announced in its year-end 2024 earnings report that its Board of Directors authorized a $15 billion stock repurchase program. The firm has about $5 billion left from its 2022 buyback program. Now, it has nearly $20 billion in total buyback authority. Eith the company worth around $79 billion as of the Feb. 5 close, its total buyback authority is equal to around 25% of its value.
Despite beating analysts' estimates on revenue, earnings, and guidance, shares dropped sharply post-earnings. The approximately 13% drop came as certain underlying metrics of the business concerned markets. The biggest reason for this concern is that the company fell short of expectations for its branded total payment volume. PayPal Checkout is a PayPal-branded checkout option that many merchants use because it can reduce friction in completing sales.
PayPal’s Chief Executive Officer has stated, “Branded checkout is an essential and important part of our business, and it is the number one priority for us." Underperforming expectations on a metric like this can spook investors, even if total revenue and earnings beat. Most Wall Street analysts lowered their price targets post-earnings, but a few raised them.
UBS: Buybacks Authorized After Strong Profits, Uncertainty Lingers
Starting off 2025 with a moderately sized buyback program authorization is UBS Group (NYSE: UBS). The Swiss financial services giant announced a $3 billion buyback authorization. This represents a moderate 3% of the company’s overall market capitalization. The company says it is looking to buy back $1 billion worth of stock in the first half of 2025 and $2 billion in the second half. The buyback announcement comes as the company blew past expectations in its latest quarterly results. The company's net profit hit $770 million, helped by strong performance in its investment banking division.
However, it is important to note that the company’s buyback plans are not set in stone. The Swiss government is currently considering new capital requirement rules for banks in its country. Regulations that overburden the company could jeopardize its ability to actually execute its buyback plan. More information about this regulation could arrive in May. UBS expects the public consultation period to start then.
Jacobs Solutions: Large Buyback Capacity, Backlog Up Substantially
Jacobs Solutions (NYSE: J) has announced a buyback program that is very significant compared to the firm's overall value. That is especially true when adding the new $1.5 billion authorization to the remaining $271 million in buyback capacity from its 2023 program. Overall, the company’s total buyback capacity is equal to nearly 11% of its $16 billion market capitalization. Jacobs works in the consulting industry and has expertise in many different areas. These include climate change, energy transition, connected mobility, buildings and infrastructure, integrated water management, and biopharmaceutical manufacturing.
Last quarter, the company saw revenue increase by 5%; however, adjusted EPS fell by over 8%. The company’s backlog increased by 19%, up to nearly $22 billion. This is around ten times the company’s quarterly revenue, indicating strong demand for its services.
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