Massive Buybacks: 3 Stocks Returning Big Cash To Shareholders

In the current market landscape, share buybacks have emerged as a prominent strategy for companies to return value to shareholders. As interest rates remain low and earnings growth prospects look promising, corporations are increasingly turning to buybacks as a means to boost earnings per share (EPS) and drive share price appreciation. Here, we highlight three companies with significant buyback capacity and their potential impact on shareholder value.

1. Fiserv (NYSE: FI)
Fiserv, a leading global provider of payments and financial services technology, has a substantial buyback capacity. With a current authorization of 78 million shares, worth approximately $18 billion at the current share price, Fiserv's buyback capacity is equal to nearly 14% of its market capitalization. This large buyback capacity could have a significant positive impact on EPS and share price appreciation. Fiserv has a strong history of utilizing its buyback capacity, spending $5.5 billion on repurchases in 2024, a 120% increase from 2022. The company's aggressive repurchase pace, combined with its strong dividend growth (16% compound annual growth rate since 2012), has contributed to Fiserv's total shareholder return of over 200% since its IPO in 2001.



2. Analog Devices (NASDAQ: ADI)
Analog Devices, a leading provider of analog technology and mixed-signal solutions, has a notable buyback capacity. With a current authorization of $11.5 billion, equal to 9.8% of its market capitalization, Analog Devices' buyback capacity could have a significant positive impact on EPS and share price appreciation. The company has a strong dividend yield of nearly 1.7%, which is among the top 20 largest for U.S. large-cap tech stocks. Analog Devices' slower pace of buybacks compared to Fiserv suggests a more selective approach to repurchasing shares, potentially waiting for more favorable market conditions to maximize the impact on EPS and share price. The combination of dividend increases and share repurchases has contributed to Analog Devices' total shareholder return of over 150% since 2012.



3. Allison Transmission (NYSE: ALSN)
Allison Transmission, a leading designer and manufacturer of commercial and defense vehicle propulsion solutions, has a massive buyback capacity. With a current authorization of $5 billion, equal to 59% of its market capitalization, Allison Transmission's buyback capacity could have a significant positive impact on EPS and share price appreciation. The company has posted an impressive total return of 163% over the last three years, over three times higher than the total return of the S&P 500 over the same period. Allison Transmission's record full-year sales and earnings in 2024 demonstrate the company's financial strength and its ability to generate cash flows that can be used to fund its buyback program. The combination of dividend increases and share repurchases has contributed to Allison Transmission's total shareholder return of over 160% since 2012.

In conclusion, Fiserv, Analog Devices, and Allison Transmission are three companies with significant buyback capacity that could have a substantial positive impact on EPS and share price appreciation. Their strong financial positions, robust cash flows, and commitment to returning value to shareholders through both buybacks and dividends make them attractive investment opportunities for those seeking exposure to companies with a strong commitment to capital return. As the market continues to evolve, investors should monitor these companies' buyback activity and dividend policies to capitalize on their potential for share price appreciation and income generation.