When corporations are profitable and established, they tend to return capital to shareholders. This can be achieved via stock buybacks to shrink the float and to support the stock, or it can be done via one-time dividends or by raising their annualized quarterly dividends. 24/7 Wall St. has covered may top dividend views for 2016. Now it is time to take a look at the 2016 stock buyback kings — companies that will spend the most buying back their common stock this year alone.

Many investors love the cash flow from dividends. After all, dividends can contribute up to 50% of total returns through time. Other investors prefer for companies to buy back their common stock. This can come with a lower effective tax rate for long-term gains, or they feel this can prop up the share price.

When picking out companies that will be buying back the largest number of shares in 2016, several things have to be considered. First and foremost, a company had to be willing to spend billions of dollars to buy its shares. Such companies also have to have a history of conducting stock buybacks, or they had to have a solid reason why they would be so aggressive in buying back stock this year alone.

24/7 Wall St. has screened many companies involved in share buybacks to create the list of companies that likely will repurchase the most shares in 2016. The reality is that investors will not know exactly which companies led the total stock buybacks in 2016 until early in 2017, when the companies disclose more data on their share buyback activities. That being said, these companies are all massive buyers of their own stock.

We also have compared each of these to the respective market capitalization, and have shown price and performance metrics. These are the 18 companies that will buy back the most in common stock during the calendar year 2016, and these companies alone are likely to spend a combined sum well in excess of $100 billion. In some cases, we also included direct quotes from these companies if it pointed out exactly how much or over what period they would conduct the buybacks.

Apple

The billions Apple Inc. (NASDAQ: AAPL) has spent buying back stock likely will continue beyond its current massive buyback plan. Apple spent roughly $3 billion in first quarter of fiscal 2016 at an average price of $115.45 per share and spent over $6.8 billion in the fourth quarter of 2015. Its November 2015 accelerated share repurchase period will end in or before April 2016. At December 26, 2015, Apple saw its share count drop on a diluted basis to 5.594 billion from 5.881 billion a year earlier.

Apple’s last earnings release said:

We generated operating cash flow of $27.5 billion during the quarter, and returned over $9 billion to investors through share repurchases and dividends. We have now completed $153 billion of our $200 billion capital return program.

Shares of Apple were recently trading at $94.50. The 52-week trading range is $92.00 to $134.54, and the consensus analyst price target is $135.92. As far as how the buyback matters here, Apple’s market cap is $521 billion.
AIG

Activist Carl Icahn is after American International Group Inc. (NYSE: AIG), which has been buying back stock and is fighting efforts to unwind the company into several companies. On February 11, 2016, AIG raised its dividend but also increased its share repurchase authorization by $5.0 billion. AIG actually already has been an active buyer of its own shares so far in 2016. The company said:

During 2015, AIG repurchased approximately $10.7 billion of shares of AIG Common Stock, pursuant to prior authorizations from the Board of Directors. AIG made additional repurchases of approximately $2.5 billion through February 11, 2016. AIG’s aggregate remaining share repurchase authorization, inclusive of today’s announced $5.0 billion authorization, is approximately $5.8 billion.

Shares of AIG were recently trading at $50.50. The 52-week range is $50.38 to $64.93, and the consensus analyst target is $64.22. The buyback matters because the market cap is $60 billion.

Boeing

Though Boeing Co. (NYSE: BA) may have seen a severe drop in its share price, this may only give it more room to buy back shares. Its board of directors recently hiked its dividend more than expected and boosted its authorization for its share repurchase program to $14 billion, replacing Boeing’s prior $12 billion authorization approved in December 2014, and the company signaled that some $5.25 billion remained available for purchase at the time.

Boeing’s release in December’s dividend hike and buyback announcement said:

Once again, we are demonstrating our commitment to a balanced cash deployment strategy that fuels investments in our people, innovation and growth, and returns significant value to our shareholders. Our strategy is rooted in a foundation of strong operating performance across our business, confidence in our team and long-term market outlook and an unmatched portfolio of products and services…. Repurchase activity is expected to resume in January 2016. The timing and volume of repurchases are at the discretion of Boeing management, however it is expected that repurchases under the new share authorization will be made over the next two to three years.

Boeing shares were trading at $114.20. The 52-week range is $102.10 to $156.91, and the consensus analyst target is $142.89. As far as how the buyback matters, its market cap is $75 billion.

Cisco

Though Cisco Systems Inc. (NASDAQ: CSCO) has now spent close to $100 billion, a fresh debt offering and buyback hike shows no end in sight to its buyback ambitions. On top of a 24% dividend hike from February 2016, its board of directors also approved a $15 billion increase in its stock repurchase program. Cisco said that as of January 23, 2016, it had repurchased and retired a grand total of 4.5 billion common shares at an average price of $20.97 per share, for a total spend of about $95.1 billion since it began buying back shares.

Also in February, Cisco sold $7 billion in notes and buybacks were cited. Cisco said:

Cisco intends to use the net proceeds from this offering for general corporate purposes, which may include repurchases of its common stock, repayment of debt, including the repayment of previously issued senior unsecured notes, acquisitions, investments, additions to working capital, capital expenditures, cash dividends and advances to or investments in its subsidiaries.

Cisco shares were recently trading at $25.90, in a 52-week range of $22.46 to $30.31. Its consensus target price is $29.10. The buybacks compare to a market cap of $130 billion.
GE

In late 2015, General Electric Co. (NYSE: GE) said that its Synchrony Financial share exchange would reduce the outstanding float of GE common stock by about 6.6% (the equivalent of approximately $20.4 billion in GE stock buyback). If you straight-line GE’s plans, Jeff Immelt could spend another $20 billion or more just in 2016 alone. It should also be noted that GE shares at the $27.75 low in February were down more than 10% from the last day of 2015 alone.

GE said at that time of the Synchrony conversion and again at the time of its dividend announcement in December:

With the completion of this exchange offer and progress to-date on the GE Capital Exit Plan, GE is on track to return more than $90 billion to investors from 2015 to 2018 with more than 90% of earnings coming from high-return industrial businesses. GE remains on track in its plan to return more than $90 billion to investors in dividends, buyback and the Synchrony exchange through 2018.

Shares of GE recently traded at $28.50, in a 52-week range of $19.37 to $31.49. GE’s consensus analyst target is $32.36. The buybacks compare to a market cap of $270 billion.

GM

General Motors Co. (NYSE: GM) may face the “peak auto” argument, but the company refuted this with its most recent earnings and buybacks. Yet, GM’s low of $26.69 in early February had its shares down a whopping 21% from the end of 2015 alone. GM also aimed to smooth over fears of excessively weak international sales. The board increased its quarterly dividend, but the big news was that it raised the stock buyback plan to $9 billion from a prior $5 billion, with an end date in 2017. At that time this represented close to 300 million shares that can be repurchased.

GM shares were trading at $28.30. The 52-week range is $24.62 to $38.99, and the consensus price target is $38.63. The buybacks compare to a market cap of $43 billion.

Gilead Sciences

It may seem odd that Gilead Sciences Inc. (NASDAQ: GILD) is buying back stock rather than increasing its drug pipelines and acquiring companies to keep its growth going. Maybe it is because it is valued at only eight times expected earnings. Gilead’s board of directors recently approved the repurchase of an additional $12 billion of its common stock. This buyback is to start on completion of an existing $15 billion repurchase program authorized in January 2015.

As of December 31, 2015, approximately $8 billion remained in the prior buyback program, so it spent $7 billion buying shares in 2015. What stands out here is that Gilead said that it intends to utilize $5 billion of the remaining January 2015 program in an accelerated share repurchase program, so its total buybacks for 2016 could easily eclipse the buybacks of 2015.

Gilead shares were trading at $88.80, while the 52-week range is $81.89 to $123.37 and the consensus analyst target is $116.68. The buyback matters here as the market cap is $124 billion.

Home Depot

It may have just raised its dividend, but Home Depot Inc. (NYSE: HD) plans to complete its $11 billion share buyback by repurchasing another $5 billion in stock in 2016. In the start of 2015, that buyback plan was actually $18 billion through the end of fiscal 2017, and Home Depot said that since 2002, through February 2015, it had returned more than $53 billion of cash to shareholders via share buybacks, retiring some 1.2 billion shares. Home Depot has targeted a dividend payout ratio of approximately 50%, and excess capital after funding the needs of the business will go toward repurchasing shares.

Shares of Home Depot were recently trading at $123.20, within a 52-week range of $92.17 to $135.47. The consensus analyst target is $140.81. The buybacks compare to a market cap of $157 billion.
IBM

Despite being a serial acquirer of its stock, International Business Machines Corp. (NYSE: IBM) has slowed its repurchase activity as criticism of engineered earnings growth has grown louder. IBM may raise its buyback plan ahead, but its earnings in January 2016 said:

The company returned $9.5 billion to shareholders through $4.9 billion in dividends and $4.6 billion of gross share repurchases. The balance sheet remains strong and is well positioned to support the business over the long term. … At the end of December 2015, IBM had approximately $5.6 billion remaining from the current share repurchase authorization.

Big Blue’s shares recently traded at $131.60. The consensus target price is $132.40, and the 52-week range is $116.90 to $176.30. The market cap is $126 billion.

Johnson & Johnson

In late 2015, Johnson & Johnson (NYSE: JNJ) disclosed that its board had approved a $10 billion share buyback plan. That new plan has no time limit, and the company had about 2.77 billion shares outstanding at the end of the third quarter. The company has bought back shares for years and years, having had prior $10 billion share buyback plans as well.

Shares of Johnson & Johnson were trading near $103.70. The 52-week range is $81.79 to $105.49. The consensus analyst target is $109.24, and the market cap is $286 billion.

McDonald’s

The official line at McDonald’s Corp. (NYSE: MCD) is that it remains committed to returning excess cash to shareholders through dividends and share repurchases. The Golden Arches is also still involved in a turnaround. It announced late in 2015 that it was targeting a $30 billion capital return plan over the three-year period ending in 2016. The company was aggressive enough that it even was willing to accept a lower credit rating to accommodate that plan with the issuance of debt. McDonald’s has roughly $10 billion expected to be returned to shareholders by the end of 2016.

McDonald’s shares traded at $116.50, in a 52-week range of $87.50 to $124.83. The consensus price target is $126.00 and the market cap is $107 billion.

Microsoft

Microsoft Corp. (NASDAQ: MSFT) had roughly $100 billion in capital and may spend more than $10 billion in share buybacks in 2016. The company has joined the many tech giants raising debt to get cash inside the United States without the repatriation penalties. The use of proceeds was said to be for general corporate purposes, but the stock buyback line was used in there as well.

Moody’s has been on record saying that Microsoft will complete a remaining $31 billion stock repurchase plan by the end of 2016. Another issue to consider is that, while Microsoft’s $3.6 billion spent on buybacks in the fourth calendar quarter of 2015 was the smallest of the four quarters in 2015, it has averaged north of $4 billion in buybacks over the past year. Microsoft shares were last seen down about 7% so far in 2016.

Microsoft shares were recently trading at $50.70. The 52-week range is $39.72 to $56.85, and the consensus analyst target is $58.56. The buybacks compare to a market cap of $398 billion.

Nike

A top performer in 2015, Nike Inc. (NYSE: NKE) generally is not considered a large buyer of its own shares. After all, it has a premium valuation to the market. Its shares were last seen down about 3% so far in 2016. What stood out with its earnings report in November was the aggressive buyback plan on top of a stock split and dividend hike. We said at that time:

Nike’s buyback plan is $12 billion with a four-year period to expiration. The company said that the current $8 billion share repurchase program is expected to be completed before the end of fiscal 2016. The new buyback program will commence upon the completion of the current program. on a relative basis, Nike has a market cap of $107 billion.

Shares of Nike recently traded at $59.60. The stock has a consensus analyst target of $71.91 and has traded in 52-week range of $47.14 to $68.19. The buyback matters here as the market cap is $101 billion.
Schlumberger

Schlumberger Ltd. (NYSE: SLB) is far from alone in the world of oil and gas services companies in facing a challenging business climate. But on top of being able to make acquisitions, Schlumberger is a big buyer of its own stock. The company may have done what employees hate to see by making some 10,000 layoffs with lower capital spending plans while approving a new $10 billion repurchase program.

Schlumberger already repurchased 5.4 million shares of stock in its fourth quarter at an average price of $73.86 per share for a total cost of $398 million. Now consider how much of the buyback matters when you hear that Schlumberger shares were last seen up 4% so far in 2016. An oil company stock up this year?

Schlumberger shares were at $71.50, in a 52-week range of $59.60 to $95.13 and with a consensus analyst target of $81.78. Note that its market cap is $89 billion.

3M

Already a capital returning company, 3M Co. (NYSE: MMM) seems almost more eager than ever to buy back stock after a solid dividend hike. 3M’s most recent board approval was for the repurchase of up to $10 billion worth of its outstanding common stock. This plan replaced its prior plan and has no official expiration date.

3M is not a stranger to returning capital to its shareholders. It announced an impressive $12 billion share buyback plan back in 2014. 3M’s history at that time showed that it had spent $5.2 billion on buybacks in 2013, up from $2.2 billion in 2012. Its stock was down handily for the year in January, but the market recovery (and perhaps buyback assumptions) has now driven shares up over 15% from the January lows, and 3M shares were last seen up by over 4% so far in 2016.

The stock was recently trading at $155.60. Its consensus analyst target is $159.40 and the 52-week range is $134.00 to $170.50. The buyback compares to a market cap of $93 billion.

UTC

Though it now may be involved in a Honeywell merger chase, United Technologies Corp. (NYSE: UTX) returned $12 billion to shareholders in 2015 via buybacks and dividends. Its board had authorized a new $12 billion share repurchase program in late 2015, which includes the $6 billion accelerated share repurchase using the net proceeds from the Sikorsky sale to Lockheed Martin. With the January 2016 earnings, UTC said:

The company also continues to expect share repurchase of $3 billion in 2016, beyond the repurchases that will be completed in 2016 under the previously announced $6 billion accelerated share repurchase program.

Shares of UTC were recently trading at $93.10. The 52-week range is $83.89 to $124.33. The consensus analyst target is $105.28, and the market cap is $77 billion.

Wal-Mart

Wal-Mart Stores Inc. (NYSE: WMT) has been and will continue to be a serial acquirer of its own stock. The company has run into sales growth problems at the same time that higher wages to millions of more workers are adding on to its costs structure at the expense of earnings for shareholders. Wal-Mart announced last October that its board of directors authorized a new $20 billion share repurchase program and that it had retired the $8.6 billion remaining on its 2013 authorization. At the time it said:

We expect over the next three years to generate around $80 billion in cash… and our intent would be to utilize this new $20 billion authorization over the next two years.

The shares were last seen at $66.60, with a 52-week range of $56.30 to $84.72. Its market cap us roughly $213 billion. While the stock was up more than 8% so far in 2016, that is after a massive fall from grace in 2015.

Wells Fargo

It may be the current king of banks by market cap ($239 billion), but Wells Fargo & Co. (NYSE: WFC) also is trading at the largest premium to its book value. So what are investors supposed to think of a recently announced expanded stock buyback plan? This bank has had and continues to have a long-term pledge to keep buying back its common stock. The Wells Fargo board of directors lifted its authority to repurchase common stock by an additional 350 million shares recently, which would come to over $17 billion at the time.

Time has proven over and over that Wells Fargo has done well by its buybacks, with billions and billions in phantom profits if it was buying the stock for a trade/investment rather than for retiring shares. One interesting point here is that as Wells Fargo buys back ever more stock, it keeps driving up the percentage owned by Warren Buffett, with a stake of 479.7 million shares already about 9.4% of the outstanding shares.

Shares of Wells Fargo were trading at $47.00. The 52-week range is $44.50 to $58.77, and the consensus analyst target is $57.28.

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No doubt the list of companies buying back the most stock will change throughout the year as business conditions change. Ultimately it will not be known which stocks have had the most share buybacks in 2016 until early 2017.

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