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Buybacks make a comeback

S&P 500 companies bought back $583 billion in their own stock in 2018 through Sept. 30, already more than the $519 billion purchased in 2017. Dividend payouts through the first nine months were on pace to finish the year slightly ahead of last year. As of the end of September, the buyback yield for the index was 2.93%, ahead of 2.28% in 2017, and the dividend yield was 1.81%, on par with 1.84% in 2017.

Share buybacks were most common in the financial and technology sectors. For the 12 months ended Sept. 30, financial firms bought $138.3 billion in their own stock, while technology firms, primarily Apple, bought about $253 billion. Apple holds 12 of the 20 largest historical quarterly buybacks, five of which occurred this year for a total $84.8 billion.

As a percentage of total shares outstanding, 6.4% of stock buybacks reduced their share count by more than 4%, while 17.7% reduced theirs by less than 4%.