These are the Top 4 Stocks for Buybacks in 2024

Key Points

• Share repurchases can offset dilutive actions and even reduce the share count for a publicly listed stock. 
• Reduced share count can boost earnings per share growth and aid dividend health. 
• Marketbeat tracks which companies are issuing repurchase authorizations for investors to capitalize.

Stock buybacks, also called stock repurchases, are important drivers of shareholder value, which is one of the reasons why Marketbeat tracks the data. As the name suggests, a buyback is when a company buys back its own shares from the market.

Buybacks are a form of capital return that can offset the dilutive impacts of share-based compensation and may even reduce the share count. Share count reduction is essential because it reduces the number of times a company is divided among shareholders and provides a lever for share prices. 

If company X trades at $100 per share with one million shares on the market, it's worth more per share when the share count is reduced. A lower share count also helps boost earnings growth on a per-share basis and improves dividend health if a distribution is paid; fewer shares mean fewer total distributions paid. More importantly, regarding dividend stocks, a reduced share count aids the outlook for distribution growth by freeing up cash flow that can be funneled into growing distributions for the remaining shares, a significant tailwind for share prices.

Let's take a look at the top four companies tracked by Marketbeat that have issued share repurchase authorizations this year. 

Adobe Leverages Share Buybacks: Shares Are Near Long-Term Lows

Adobe Inc.'s NASDAQ: ADBE share prices are near long-term lows and at levels where the company could step in to support the market. Adobe tops the list of recent repurchase announcements, having issued an authorization for $25 billion or 10% of the market cap at the time of the release. The percent relative to the market cap has increased significantly since then, suggesting a growing opportunity for investors. 

The question is whether Adobe's repurchases will move the needle, and the answer is yes. The company leans toward share-based compensation but has reduced its share count over the last year by 0.85%. That’s not a large figure, but accretive to shareholders and supportive of the price action. Analysts also support the price action. The latest earnings release left something to be desired but resulted in numerous reiterated ratings and price targets. The consensus is Moderate Buy with at least a 30% upside. 

HCA Healthcare Makes Healthy Repurchases of its Stock

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