In this article, we will be taking a look at the 10 companies that are buying back their stock in 2022.
So far in 2022, we have seen a number of companies, small and blue-chip names alike, announcing their intentions to initiate share buyback programs. Many companies choose to repurchase their own stocks either on the open market or from their shareholders directly. In recent times, share buybacks have begun to take the wheel from dividends as companies’ preferred method of returning cash to their shareholders.
This year, many renowned companies across various sectors have authorized large share repurchase programs. Some notable examples include Exxon Mobil Corporation (NYSE:XOM), Apple Inc. (NASDAQ:AAPL), and NIKE, Inc. (NYSE:NKE). According to the Wall Street Journal this May, share repurchases by S&P 500 companies were set to hit the $1 trillion mark this year. With large-scale market declines resulting in stock prices plummeting, companies that are looking to buy back their shares are cashing in on large profits since they get to repurchase these shares at discounted prices.
As of this May, the S&P 500 companies that had reported their first-quarter results had gone on to spend about $269 billion on buybacks from the start of 2022 till May. This represented a 58% increase in buyback activity this year, in comparison to a year ago.
Let’s now take a look at the 10 companies that are buying back their stock in 2022.
Our Methodology
We have selected notable companies that have made stock buyback announcements so far in 2022. Using Insider Monkey’s second quarter hedge fund data, we have picked companies popular among hedge funds so far this year. We have also mentioned analyst ratings and price targets for their stocks, ensuring they have mostly positive ratings and targets implying upside potential.
Companies that are Buying Back Their Stock in 2022
10. The Mosaic Company (NYSE:MOS)
Stock Buyback Amount: $2,000,000,000
Number of Hedge Fund Holders: 50
The Mosaic Company (NYSE:MOS) is a materials company that produces and markets concentrated phosphate and potash crop nutrients. The company operates in North America and internationally. It works through its Phosphates, Potash, and Mosaic Fertilizantes segments.
On August 3rd, Citigroup’s P.J. Juvekar upgraded shares of The Mosaic Company from Neutral to Buy. The analyst also raised the price target on the stock from $57 to $61.
This August, The Mosaic Company reported its revenues for the month of July. The company generated $391 million in revenue, in comparison to $191 million generated in July 2021. The Mosaic Company currently has a one-year dividend growth rate of 33.3% as well. This February, the company announced a $400 million accelerated share repurchase program. It aimed to buy about 7.1 million shares of its common stock from Goldman Sachs initially, with the program being completed by the second quarter of 2022.
The Mosaic Company was found among the 13F holdings of 50 hedge funds in the second quarter, with a total stake value of $895 million. Of these funds, Soroban Capital Partners was the largest stakeholder in the company, holding 6.7 million shares worth about $317.7 million.
The Mosaic Company, like Exxon Mobil Corporation, Apple Inc., and NIKE, Inc., is one of the companies most popular among hedge funds today.
9. Devon Energy Corporation (NYSE:DVN)
Stock Buyback Amount: $2,000,000,000
Number of Hedge Fund Holders: 57
Devon Energy Corporation (NYSE:DVN) is an oil and gas exploration company engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids in the US. The company operates about 5,134 gross wells. It is based in Oklahoma City, Oklahoma.
A Buy rating was reiterated on Devon Energy Corporation on August 18, by analyst Vincent Lovaglio at Mizuho. The analyst also raised his price target on the shares from $88 to $91.
This August, Devon Energy Corporation announced its agreement to acquire Eagle Ford shale operator Validus Energy. The acquisition is valued at $1.8 billion in cash, and the company has stated that it will secure a premier acreage position of 42,000 net acres adjacent to its existing Eagle Ford leasehold. This May, Devon Energy Corporation expanded its previous share repurchase program by 25% to $2 billion. The new authorization has now extended its share buyback through May 4, 2023.
There were 57 hedge funds long Devon Energy Corporation in the second quarter, and 66 hedge funds long the stock in the previous quarter. Their total stake values were $1.5 billion and $1.9 billion respectively.
Investment management company GoodHaven Capital Management mentioned Devon Energy Corporation in its second quarter 2022 investor letter. Here’s what they said:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
8. Dow Inc. (NYSE:DOW)
Stock Buyback Amount: $3,000,000,000
Number of Hedge Fund Holders: 45
Dow Inc. (NYSE:DOW) is a commodity chemicals company providing a range of materials science solutions for packaging, infrastructure, mobility, and consumer applications. The company operates in the US, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. It works through its Packaging & Specialty Plastics, Industrial Intermediaries & Infrastructure, and Performance Materials & Coating segments.
In the second quarter, Dow Inc. had an EPS of $2.31, beating estimates by $0.17. The company’s revenue was $15.6 billion, up 12.81% year over year and beating estimates by $121.47 million. Over the next three to five years, the company’s EPS is expected to grow by about 10.57%. This April, Dow Inc. announced a new share buyback program to repurchase about $3 billion worth of the company’s common stock. This is an additive to the company’s existing buyback program, and does not have an expiration date. The previous program had about $775 million worth of authorization remaining, and the company intended to repurchase it by mid-2022.
Analyst Michael Sison at Wells Fargo reiterated an Overweight rating on Dow Inc. shares on September 13. The analyst also placed a $60 price target on the stock.
Pzena Investment Management was the largest stakeholder in Dow Inc. in the second quarter, holding 6.3 million shares worth about $323.9 million. In total, 45 hedge funds were long the stock, with a total stake value of $871 million.
7. salesforce.com, inc. (NYSE:CRM)
Stock Buyback Amount: $10,000,000,000
Number of Hedge Fund Holders: 116
Salesforce.com, inc. (NYSE:CRM) is an information technology company providing customer relationship management technology. The company’s tech brings companies and customers together across the globe. Its service offerings include Sales to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and relationship intelligence, and deliver quotes, contracts, and invoices.
This September, salesforce.com, inc. (NYSE:CRM) shares began rising in light of an upgraded rating at Guggenheim, placed by John Difucci. The analyst now has a Neutral rating on the stock, with a $150 price target.
Difucci noted that salesforce.com, inc. (NYSE:CRM) will be able to reach its goal of a $50 billion revenue by 2026 if the company continues with its acquisition spree. The company most notably acquired Slack just last year, for $28 billion. This August, salesforce.com, inc. (NYSE:CRM) announced its first share repurchase program worth about $10 billion. It covers 6.4% of the company’s total shares. The company commented that the program is meant to allow it to deliver value to its shareholders on its path to a $50 billion revenue in 2026.
Our hedge fund data shows 116 hedge funds long salesforce.com, inc. (NYSE:CRM) in the second quarter, with a total stake value of $7.9 million.
6. Broadcom Inc. (NASDAQ:AVGO)
Stock Buyback Amount: $10,000,000,000
Number of Hedge Fund Holders: 66
Broadcom Inc. (NASDAQ:AVGO) is a semiconductors company that designs, develops, and supplies semiconductor devices. The company focuses on complex digital and mixed signal complementary metal oxide semiconductor-based devices. It operates through its Semiconductor Solutions and Infrastructure Software segments.
William Stein at Truist holds a Buy rating on Broadcom Inc. shares as of September 2. The analyst also placed a $630 price target on the stock.
Broadcom Inc. expects revenue of $8.9 billion heading into the fourth quarter, compared to the estimate of $8.72 billion. It also noted that its adjusted EBITDA will be about 63% of its revenue. This May, Broadcom Inc. also announced a share repurchase program worth about $10 billion. The program covers 4.3% of the company’s shares, and is expected to go through December 31, 2023.
The largest stakeholder in Broadcom Inc. in the second quarter was Fisher Asset Management, holding 1.5 million shares worth $716.3 million. The total number of hedge funds long the stock was 66, with a total stake value of $4.03 billion.
Broadcom Inc., like Exxon Mobil Corporation, Apple Inc., and NIKE, Inc., is among the most renowned stocks hedge funds are piling into this year.
5. Exxon Mobil Corporation (NYSE:XOM)
Stock Buyback Amount: $10,000,000,000
Number of Hedge Fund Holders: 72
Exxon Mobil Corporation is an integrated oil and gas company. It is based in Irving, Texas.
On September 12, Piper Sandler’s Ryan Todd reiterated an Overweight rating on Exxon Mobil Corporation shares. The analyst also placed a $108 price target on the stock.
This April, Exxon Mobil Corporation said that it intends to repurchase up to $30 billion in shares by the end of 2023. This expands the company’s earlier estimates of repurchasing $10 billion worth of shares.
There were 72 hedge funds long Exxon Mobil Corporation in the second quarter, with a total stake value of $7.4 billion.
First Eagle Investments is an independent, privately owned asset management firm. The firm mentioned Exxon Mobil Corporation in its second quarter 2022 investor letter. Here’s what it said:
“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industrywide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”
4. The Home Depot, Inc. (NYSE:HD)
Stock Buyback Amount: $15,000,000,000
Number of Hedge Fund Holders: 80
The Home Depot, Inc. (NYSE:HD) is a home improvement retailer. The company sells building materials, home improvement products, and decoration-related products, among more.
Sam Hudson at Atlantic Equities holds an Overweight rating on The Home Depot, Inc., as of September 1.
This August, The Home Depot, Inc. announced a $1.9 per share quarterly dividend. The company also authorized a share repurchase program of $15 billion at the same time, consisting of 4.5% of its shares. However, it did not mention how long it would take to deploy the share repurchase program completely.
Our hedge fund data shows 80 hedge funds long The Home Depot, Inc. in the second quarter, with a total stake value of $5.4 billion. In the previous quarter, 75 hedge funds were long the stock, with a total stake value of $5.6 billion.
3. NIKE, Inc. (NYSE:NKE)
Stock Buyback Amount: $18,000,000,000
Number of Hedge Fund Holders: 72
NIKE, Inc. is a footwear company providing athletic and casual footwear, apparel, and accessories. It is based in Beaverton, Oregon.
An Outperform rating as reiterated on NIKE, Inc. shares by analyst John Kernan on September 12. The analyst also placed a $124 price target on the stock.
NIKE, Inc. has authorized a share repurchase program of $18 billion, covering 11% of its shares, this June. The program is meant to span over four years, and is replacing the company’s previous share repurchase program of $15 billion, meant to end in 2023.
NIKE, Inc. had 72 hedge funds long its stock in the second quarter. Their total stake value was $3.3 billion.
2. Morgan Stanley (NYSE:MS)
Stock Buyback Amount: $20,000,000,000
Number of Hedge Fund Holders: 58
Morgan Stanley (NYSE:MS) is a financials company offering banking and finance products and services. The company operates in the Americas, Europe, the Middle East, Africa, and Asia.
Matt O’Connor, an analyst at Deutsche Bank, has a Hold rating on Morgan Stanley shares as of September 12. The analyst also placed a $92 price target on the stock.
This June, Morgan Stanley initiated a share buyback program worth $20 billion, consisting of 14.8% of its shares. The repurchase program is multi-year and has no expiration date. It begins in the third quarter of 2022.
Out of 895 hedge funds tracked in the second quarter, 58 funds were long Morgan Stanley. Their total stake value was $2.9 billion. In comparison, 61 hedge funds were long the stock in the previous quarter, with a total stake value of $3.3 billion.
Sound Shore Management, an investment management firm, mentioned Morgan Stanley in its second quarter 2022 investor letter. Here’s what the firm said:
“Morgan Stanley (NYSE:MS) is a long term holding, retreated despite having business models that are more resilient, over-capitalized and underappreciated by the market. In June, the Federal Reserve’s stress tests again blessed the health of the overall banking system. Morgan Stanley stood out with an 11% increase in its annual dividend, yielding 4.1% at quarter’s end.”
1. Apple Inc. (NASDAQ:AAPL)
Stock Buyback Amount: $90,000,000,000
Number of Hedge Fund Holders: 128
Apple Inc. is an information technology company known most for its production of the iPhone. The company is based in Cupertino, California.
Toni Sacconaghi at Bernstein holds a Market Perform rating on Apple Inc. shares as of September 14. The analyst also holds a $170 price target on the shares.
This April, Apple Inc. announced a share repurchase program covering 3.5% of the company’s shares. The program is worth $90 billion, and is part of the company’s ongoing share repurchase agreement spanning multiple years.
Apple Inc. was found in the 13F holdings of 128 hedge funds in the second quarter. Their total stake value was $143 million.
See also Aquamarine Capital’s Top 10 Stock Picks and 10 Best Dividend Stocks to Buy According to Billionaire Howard Marks.
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