With stocks on the Dow Jones Industrial Average and the S&P 500 having just hit record highs, investors need at least a bit of an explanation here. After all, this has been an unloved and unexpected rally of 7% in just 10 days or so, when many retail and institutional investors have reportedly been selling stocks rather than only buying. This rally is defying more negative trends than usual. One thing likely contributing to the gains is the endless effort in share buybacks by the biggest companies during June and July. 24/7 Wall St. recently featured 18 companies that will buy back the most stock in 2016.

Here we have identified five of the largest buybacks to see which companies are driving this train higher. The tally remains unknown because most earnings have yet to be reported. Still, the prior buyback kings have to have been big players here. Just in May, TrimTabs showed that inflows were suggesting that buybacks had peaked, but then came the Brexit-panic and then a snapback in the June payrolls report that negated the weak payrolls report from May.

24/7 Wall St. looked at the share prices of each of these five companies over the past 90 days to try to capture what might have taken place during the second quarter of 2016 and into the start of July. After all, buybacks have to be at least a part of this stock market rally as the Dow and S&P 500 hit new all-time highs.

Additional color has been added on each buyback to show relative value. Also shown are the market caps, the consensus analyst price targets compared with the current prices and the 52-week trading ranges. Dividend yields also have been included, and these are listed in descending order.

McDonald’s

In the first quarter of 2016, McDonald’s Corp. (NASDAQ: MCD) had spent $4.312 billion on buybacks, but it spent a total of $9.805 billion in the trailing 12 months. McDonald’s borrowed money in recent quarters to boost its buyback and dividend, even at the cost of a credit downgrade, and that drop of 2.5% in the past 90 days probably has allowed McDonald’s to buy more shares. If not, maybe it can say it was busy working on a headquarters moving plan.

At the most recently close of $122.82, McDonald’s has a market cap of $108 billion. Its consensus price target is $130.71, and the 52-week range is $87.50 to $131.96. The dividend yield is 2.9%.

Pfizer

Pfizer Inc. (NYSE: PFE) may have been prevented from moving overseas like it once wanted to, but its shares were up over 12% over the past 90 days. The drug giant spent $5.0 billion buying stock in the first quarter, and while the bulk of that buying was under an accelerated buyback plan, it seems logical that Pfizer has been buying its own stock with the largest quarterly gain of these five stocks. Pfizer is now over $60 billion deep in buyback spending over the trailing 10 years.

Shares closed at $36.31, with a market cap of $220 billion. The consensus price target is $38.67, the 52-week range is $28.25 to $36.46 and the current dividend yield is 3.3%.
GE

The long-term plan at General Electric Co. (NYSE: GE) is getting its share count down to 8 billion shares, so it seems very certain GE will continue on its buyback warpath if its share count is 9.2 billion now. The company spent $6.326 billion in the first quarter and had spent $8.06 billion total in the trailing 12 months on buybacks. It keeps selling more financial assets and is 80% or 85% of the way done. Much of that new cash is being used to shrink its float. GE has now spent over $54 billion over 10 years on buybacks. GE shares have risen more than 5% in the past 90 days.

Shares closed at $32.36, within a 52-week range of $19.37 to $32.50. The consensus price target is $33.00. The market cap is roughly $297 billion, and the dividend yield is over 2.8%.

Apple

Apple Inc. (NASDAQ: AAPL) may be on the way to being the largest share buyback player of all-time. It is not spending massive money buying anything else, and Apple’s product cycle is not working in its favor. Its shares are down 13% over the past 90 days or so, so maybe Apple has decided to be more aggressive while it figures out how to get the next “wow-factor” out. Apple’s buyback tab was $6.667 billion during the first quarter of 2016, but it was $36.783 billion for the trailing 12 months. Apple has now spent $116 billion in five years buying its stock, and its cash hoard should allow Apple to buy much more stock.

Apple closed at $96.87, with a market cap of $530 billion. Its consensus price target is $123.33, and it has a 52-week range of $89.47 to $132.97. The dividend yield is 2.3%.

Gilead Sciences

In the first quarter of 2016 alone, Gilead Sciences Inc. (NASDAQ: GILD) spent $8.0 billion on buybacks, coming to a total of $14.101 billion for the trailing 12 months. This was part of a $12 billion buyback plan, which was meant to follow the completion of the previous $15 billion authorized share buyback plan. How ironic is it that the world’s largest biotech outfit is outspending the largest drug companies on buybacks? If Gilead is an opportunist, maybe it is taking advantage of its shares being down 11% in the past three months or so.

Gilead shares closed most recently at $85.77, with a market cap of $114 billion. The consensus price target is $110.42, and the stock has a 52-week trading range of $81.28 to $123.37. The dividend yield is 2.3%.

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When 24/7 Wall St. looked at just the top 20 buyers of the most stock from the S&P 500 components, it turned out that these 20 companies alone spent a total of $616 billion in the past five years buying back stock. The cumulative total is a whopping $943 billion in the trailing 10-year period

Another figure to consider is that the first quarter of 2016 marked the ninth consecutive quarter in which over 20% of the S&P 500 Index members shrank their diluted share count by 4% or more in a year. We will get to see the net result of the second quarter in buybacks over the next two weeks or so. Don’t forget about the banks either, as they just were cleared for expanded capital returns plans unilaterally.

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