S&P 500 companies will buy back a record $800 billion of their own shares in 2018, funded by savings on tax, strong earnings and the repatriation of cash held overseas, according to a new study by J.P. Morgan. That will far exceed the $530 billion in share buybacks that was recorded in 2017.
Companies have already announced $151 billion of buybacks in the year to date. There were $113.4 billion of buyback announcements in February alone, a three-year high, according to Trim Tabs Investment Research.
It's worth noting that stocks with higher buyback yields and new announcements tend to outperform their peers, especially during corrections and recessions. Since 2000, those stocks have outperformed peers by 150 basis points during corrections and 200 basis points during recessions, J.P. Morgan analysts said.