2011 Stock Buybacks on Fire, Over $34 Billion (PFE, UNP, GME, ERTS, GD, TUP, MHS, VZ, UNM, MO, AZN, SYMC, YUM, DGX, COH, TIF, INTC)

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The method of using capital from the corporate treasury to return capital to shareholders via share repurchase programs has long been under question.  Most buybacks never are fully utilized, and many simply offset dilution from employee stock options.  It doesn’t matter.  The buyback announcements are continuing at a feverish pace into 2011 and there is no reason to suspect that the pact will drop any time soon.  We have identified some of the top buybacks and the figure is astonishing.  The tally of just the recent buybacks comes to a whopping $34 billion….

We tracked buybacks from Pfizer Inc. (NYSE: PFE), Union Pacific Corporation (NYSE: UNP), GameStop Corporation (NYSE: GME), Electronic Arts Inc. (NASDAQ: ERTS), General Dynamics Corporation (NYSE: GD), Tupperware Brands Corporation (NYSE: TUP), MedcoHealth Solutions Inc. (NYSE: MHS), Verizon Communications Inc. (NYSE: VZ), Unum Group (NYSE: UNM), Altria Inc. (NYSE: MO), AstraZeneca (NYSE: AZN), Symantec Corporation (NASDAQ: SYMC), Yum! Brands Inc. (NYSE: YUM), Quest Diagnostics Inc. (NYSE: DGX), Coach Inc. (NYSE: COH), Tiffany & Co. (NYSE: TIF), and from Intel Corporation (NASDAQ: INTC).  We have outlined some basics on each below.

Pfizer Inc. (NYSE: PFE) added to its prior buyout plan with some $5 billion this week.  Union Pacific Corporation (NYSE: UNP) announced this week that it would buy back up to 40 million shares, which comes to about $375 million or so versus a market cap of $46 billion.  GameStop Corporation (NYSE: GME) also jumped into the buyback bandwagon and authorized some $500 million for buybacks over the next year and a half.  Not bad at all for a $3 billion market cap.  Electronic Arts Inc. (NASDAQ: ERTS) committed some $600 million over an 18-month period versus a market cap of roughly $600 million.  When video game companies resort to share buybacks, does that sound like great growth?

This week came another plan from General Dynamics Corporation (NYSE: GD) after its board approved the repurchase of up to 10 million common shares.  That comes to about $750 million versus a $28 billion market cap.  Tupperware Brands Corporation (NYSE: TUP) reported this week that it was using up to $600 million to expand its prior buyback program.  That is massive in terms of scale if you consider its $3.3 billion market cap.  MedcoHealth Solutions Inc. (NYSE: MHS) added to its buyback plan and the authorization went to $3 billion.  Not bad for a $26 billion company.

Verizon Communications Inc. (NYSE: VZ) only utilized about 40% of its prior buyback plan, but this week it announced a buyback plan for up to 100 million shares.  That would come to about $3.6 billion or so versus a market cap of about $102 billion.  Unum Group (NYSE: UNM) reported with its earnings that it would buy back up to $1 billion in common stock versus a market cap of roughly $8 billion.

Late in January came announcements of $1 billion from Altria Inc. (NYSE: MO), a doubling in the total buybacks to some $4 billion from AstraZeneca (NYSE: AZN), and $1 billion from Symantec Corporation (NASDAQ: SYMC).  Even Yum! Brands Inc. (NYSE: YUM) threw in up to $750 million for buybacks over the next couple of years.  Another buyback plan in late-January came from Quest Diagnostics Inc. (NYSE: DGX) for some $750 million.

Purses, belts, wallets, and even jewelry must translate to buyback.  In late-January came buyback announcements form Coach Inc. (NYSE: COH) and Tiffany & Co. (NYSE: TIF).  Coach set $1.5 billion versus a market cap of close to $16 billion, while Tiffany & Co. said it would resume share buybacks with some $402 million remaining.

Two weeks ago came the Intel Corporation (NASDAQ: INTC) announcement of a $10 billion buyback plan versus close to a $120 billion market cap.

The irony is that we did not even tally up the few dozen that were listed in the $50 to $250 million range in the recent days and weeks.  We tallied over $30 billion by the same method for December.  The buybacks continue…

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JON C. OGG

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