3 Companies Buying Back Stock: Here's Why They're Doing It

Group 1: Mastercard - Mastercard's board approved a stock buyback program of up to $12 billion, indicating the stock is undervalued and expected to rise [16] - The company currently generates a return on invested capital (ROIC) of up to 55%, which supports the decision to reinvest through buybacks rather than dividends [3][10] - Analysts from Morgan Stanley have reiterated an overweight rating on Mastercard, with a fair valuation target of $654 per share, suggesting a potential upside of 23% from current levels [22] Group 2: Kroger - Kroger announced a stock buyback program of up to $7.5 billion, representing approximately 16.6% of its market capitalization, which has attracted institutional investors [17] - The company's ROIC stands at 14%, which is higher than the average return of the S&P 500, making the buyback a more attractive option than dividends [18] - Bank of America has raised its price target for Kroger to $75, implying a potential rally of up to 20.4% from the current trading price [23] Group 3: Archer-Daniels-Midland - Archer-Daniels-Midland's stock is currently priced at $74.02, with a forecasted earnings per share (EPS) growth of 30% over the next 12 months, from $1.03 to $1.33 [25] - The company is expected to recover profitability levels once supply chain issues related to the Russia-Ukraine conflict are resolved [19]