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Share Buybacks Seen Continuing at Record Rate in 2022

'Most of the companies have significant cash positions right now. There’s enough cash to do almost anything,' one expert says.
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Experts expect the record pace of stock buybacks to continue next year.

“Most of the companies have significant cash-flow positions right now. There’s enough cash to do almost anything,” said Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices, quoted by The Wall Street Journal.

S&P 500 companies had $3.78 trillion in cash and cash equivalents as of Sept. 30, up from $3.41 trillion a year earlier.

These companies’ share buybacks are seen hitting a record $850 billion for this year as a whole, up 63.6% from last year and 16.6% from 2019.

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To be sure, not everyone is high on buybacks. They don't always have a lasting impact on a company’s stock price, according to Investopedia. What they do accomplish is to lift companies’ earnings per share for the short term. And many executives’ compensation is tied to EPS.

Last month, the House passed a 1% tax on share repurchases, but that’s part of the spending plan that has stalled in the Senate.

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