3 Companies Boosting Buybacks While Others Pull Back

Group 1: Stock Buybacks Overview - Stock buybacks, or share repurchases, are common practices for companies to allocate capital, reducing the number of outstanding shares and potentially raising stock prices if demand remains constant [1] - Buybacks typically come from a company's free cash flow (FCF) and can be controversial; companies may repurchase shares believing their stock is undervalued, but growth-oriented investors may avoid these stocks if they see buybacks as a sign of limited growth prospects [2] Group 2: S&P 500 Buyback Trends - In the first half of 2025, share repurchases by S&P 500 companies were strong, but recent earnings reports indicate a slowdown in buybacks due to anticipated increased capital expenditures and lower interest rates [3] - This environment presents an opportunity for income-oriented investors to focus on companies that continue to increase their buyback efforts, which may lead to stock price appreciation and safe dividends [3] Group 3: Capital One Financial - Capital One Financial's stock has increased over 64% in the last 12 months and over 26% in 2025, outperforming the S&P 500 and ranking among the strongest in the finance sector [4] - The acquisition of Discover Financial is a key catalyst for Capital One, expected to enhance its negotiating power with Mastercard and Visa, although buybacks returned to a three-year average in the second quarter following a spike in the first quarter [5] - Management plans to increase stock buybacks in the coming quarter, which could serve as a catalyst for COF stock, currently trading near its 52-week high [6] Group 4: AutoZone - AutoZone has a strong history of share repurchases, reducing its outstanding share volume by an average of 7.9% over the last three years, contributing to a total return of over 90% in the same period [8][9] - Increasing free cash flow supports future growth for AutoZone, which benefits from macroeconomic conditions that make vehicle repairs more appealing to consumers [9] - AutoZone's stock is trading above its consensus price target, with analysts issuing high price targets following its last earnings report [10] Group 5: Apple Inc. - Apple has a history of stock buybacks at a rate of around 4% over the past few years, including the repurchase of 104 million shares in the most recent quarter, contributing to a total return of over 100% in the last five years [12] - The company has a 14-year history of increasing its dividend, appealing to both growth and income investors, despite concerns about its AI strategy and supply chain reliance on China [11][12]