The Financial Times noticed that American companies cannot get rid of the bad habit of buying back their stocks, even when the USA has entered the biggest recession in decades.
While the total amount of buyback is expected to shrink this year, since the coronavirus pandemic caused a decrease in corporate revenues, S&P 500 companies increased the amount shares bought back by 0,3% on average. This means that each dollar earned is precious and the companies have been focused on buying back their own shares even more rather than attracting investments in their distribution network.
On top of that, more in-depth analysis showed that some of the biggest international U.S.-based corporations are still buying back their stocks, with the hi-tech sector being the biggest buyer.
Let's take a closer look at Alphabet. This is Google's parent company, which allocated 6,9 billion dollars to buy back the stock this quarter. This is 92% more than last year.
Microsoft, the world-famous tech giant, spend over 5,8 billion dollars on buybacks this quarter. This is a 25% increase as opposed to the same reporting period of 2019. Probably that's one of the key reasons for the corporation's increased resources.
Biogen spent 2,8 billion dollars (+17%). WR Berkley spend 97 million dollars. Celanese is planning to allocate 0,5-1,5 billion dollars on buybacks.
Without any doubt, Apple is the king of buybacks. They spent 16 billion dollars on buybacks in Q2 2020, which is 6% less than last year. This time this was the biggest buyback in history among S&P 500 companies.
