Global buybacks declining, new record for dividends

Despite the global dividends sian rose to a new record in 2023, companies spent much less to buy back the own actions: is the photograph taken from the latest annual study of Janus Henderson on the repurchase of shares (buyback). The $1.11 trillion total was $181 billion lower than 2022, a significant 14% decline from the previous year and large enough to bring 2023 repurchases below the 2021 total.

US companies bought back more shares

The US companies were the largest buyers of own actions, totaling $773 billion in 2023. However, they also made a sharp cut from the previous year: U.S. buybacks fell by $159 billion last year, a 17% decline from 2022. US technology companies are the ones that have reduced their buybacks the most, spending 69 billion dollars less than the previous year. Among these, Microsoft and Meta reduced buybacks by almost a third and Apple by a seventh.

They registered strong reductions also across much of the U.S. healthcare sector and among financials, though not in the banking sector, where cuts at some banks were more than offset by increases in other sectors. Overall, in the United States, the number of companies that spent less on stock buybacks outnumbered companies that spent more, by a ratio of 1.8:1. Nonetheless, the value of buybacks was 1.2 times greater than the value of dividends paid by US companies in Janus Henderson's Global Dividend Index.

European companies are growing in interest in increasing buybacks

THE buyback are becoming more generous in Europe. Across the region, total spending on share buybacks rose 2.9% to $146 billion in 2023 (compared to an underlying increase in dividends of 20% over the same period). The variations from one country to another were notable: buybacks reached a record level in Italy (led by Unicredit and Stellantis), Spain (led by Santander, Iberdrola and Telefonica), Norway (Equinor) and Belgium (AB-Inbev and KBC), although France, Switzerland and the Netherlands saw higher buybacks by value.

The most significant contraction was registered in Switzerland, where most companies have reduced buybacks; Nestle had the biggest impact, nearly halving its program to $5.8 billion. Approximately the same number of European companies increased share buybacks and reduced them in 2023, although strong dividend growth in 2023 meant that buybacks grew less than dividends and their impact on shareholder returns fell. to 48% of dividends paid, compared to 55% in 2022.

TTLC, banks and vehicle manufacturers repurchased more shares

At a sectoral level, the technology, healthcare and financials saw the largest reductions in share buybacks, with the impact greatest among U.S. companies. In fact, outside the United States, healthcare companies have increased buybacks. Companies in the chemicals, mining and consumer goods sectors, such as tobacco and household products, also reduced share buybacks. Globally, the most significant increases were recorded by telecommunications companies, banks and vehicle manufacturers.

It's worth noting that buybacks are highly concentrated. Little more than half of the companies present in the index dthe Janus Hendersons, made up of 1,200 companies, bought back shares in 2023, but only 45 of these accounted for half of the annual total spent on share repurchases globally.