Share buybacks have hit record levels this year, but they are about to be hit by taxes. These 10 companies were the largest buyers of their own shares in 2022.

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Democrats plan to introduce a 1% tax on share buybacks as part of President Biden’s latest bill.Kevin Dietsch/Getty Images

  • Democrats plan to introduce a 1% tax on share buybacks as part of Joe Biden’s climate and tax bill.

  • S&P 500 companies spent more than $280 billion in the most recent quarter to buy back their own shares.

  • Share buybacks are typically optimistic for investor sentiment, as they show a company’s confidence in itself.

Democrats plan to introduce a 1% tax on share buybacks as part of President Joe Biden’s Inflation Reduction Act.

The tax — which has historically been supported by high-profile Democrats, including Senator Elizabeth Warren — is unlikely to be welcomed by investors.

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A buyback is when a company buys back its own shares in the market. It returns money to investors by increasing the company’s stock price, while also increasing key performance metrics such as earnings per share.

Mega-cap companies, including Apple and Facebook parent Meta Platforms, have been big proponents of share buybacks in recent years.

And the top 20 S&P 500 companies spent a record $118 billion on share repurchases in the first quarter of 2022, up 70% from the same quarter in 2021, according to index data. In the past five years, that number has risen to a whopping $1.24 trillion.

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Here are the 10 companies that have spent the most on share buybacks so far this year.

1. Apple

1. Apple

Markets Insider

ticker: AAPL

Redemption Value: $22.96 billion

Performance in 2022 vs. S&P 500: +6.8 percentage points

2. Alphabet

2. Alphabet

Markets Insider

ticker: GOOGL

Redemption Value: $13.30 billion

Performance in 2022 vs. S&P 500: -6.3 percentage points

3. Meta-platforms

3. Meta-platforms

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ticker: META

Redemption Value: $10.43 billion

Performance in 2022 vs. S&P 500: -37.5 percentage points

4. Microsoft

4. Microsoft

Markets Insider

ticker: MSFT

Redemption Value: $8.82 billion

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Performance in 2022 vs. S&P 500: -3.8 percentage points

5. S&P Global

6. S&P Global

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ticker: SPGIA

Redemption Value: $7.07 billion

Performance in 2022 vs. S&P 500: -6.1 percentage points

6. Amgen

5. Amgen

Markets Insider

ticker: AMGN

Redemption Value: $6.36 billion

Performance in 2022 vs. S&P 500: +19.9 percentage points

7. Wells Fargo

7. Wells Fargo

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ticker: WFC

Redemption Value: $6.02 billion

Performance in 2022 vs. S&P 500: +2.4 percentage points

8. Bristol-Myers Squibb

8. Bristol-Myers Squibb

Markets Insider

ticker: BMY

Redemption Value: $5 billion

Performance in 2022 vs. S&P 500: +28.9 percentage points

9. Lowe’s Companies

9. Lowe's Companies

Markets Insider

ticker: LOW

Redemption Value: $4.04 billion

Performance in 2022 vs. S&P 500: +9.5 percentage points

10. Morgan Stanley

10. Morgan Stanley

Markets Insider

ticker: MRS

Redemption Value: $3.68 billion

Performance in 2022 vs. S&P 500: -0.1 percentage point

Read the original article on Business Insider

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