When corporations are profitable and established, they tend to return capital to shareholders. This can be achieved via stock buybacks to shrink the float and to support the stock, or it can be done via one-time dividends or by raising their annualized quarterly dividends. Both are activities I do cover on this blog on a regular basis.
Many investors love the cash flow from dividends. After all, dividends can contribute up to 50% of total returns through time. Other investors prefer for companies to buy back their common stock. But a good alternative is to combine both shareholder friendly activities.
When picking out companies that will be buying back the largest number of shares in 2016, several things have to be considered. First and foremost, a company had to be willing to spend billions of dollars to buy its shares. Such companies also have to have a history of conducting stock buybacks, or they had to have a solid reason why they would be so aggressive in buying back stock this year alone.
As for which stocks are particularly well-positioned to be the beneficiaries of corporate buyback efforts, investors may want to put the following names on their radar. Attached you will find a selection of the 20 cheapest large cap stocks with a buyback announcement during the past 12 month.
These are the results...
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| 20 Cheapest Large Cap Buyback Opportunities |