These Two Companies Have Announced Huge Buyback Programs

Nike (NYSE:NKE) and CVS (NYSE:CVS) both announced substantial buyback programs on Wednesday.

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According to Nike CEO Mark Parker in a press release, “Over the past 10 years, NIKE, Inc. has returned $10 billion to shareholders through the repurchase of more than 167 million shares.” The new plan will buy back $8 billion worth of Class B common stock over four years. Nike currently has about 361 million of Class B shares outstanding, and a total market capitalization of $44.5 billion.

“We believe repurchasing our shares is a prudent use of our cash and are pleased to extend NIKE’s track record of returning value to shareholders through sustained share repurchases,” said Parker.

CVS plans to repurchase up to $6 billion in shares at a rate of $3 billion to $4 billion per year. Some analysts question the wisdom of this move, citing an uninspiring net payout yield and the fact that the stock is trading near an all-time high. CVS has already repurchased $8.3 billion in shares since 2007.

The company is one of the largest pharmacy healthcare providers in the United States with a market cap of $60.95 billion. The new program targets about 10 percent of outstanding shares. Other evaluations view the buyback as a good move by a company that has been performing well for the past 10 years, citing growing dividends and rapidly growing revenue.

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