Buyback Yield

Buyback yield is the percentage of a company's market cap it spent on net share repurchases over the past year — the buyback counterpart to dividend yield. Net is the operative word: repurchases minus new shares issued, because a company that buys back $2B while issuing $2B of stock compensation has returned nothing.

That gross-versus-net gap is where the analysis lives. Plenty of large tech companies run headline repurchase programs that mostly mop up dilution from stock-based comp; the announced dollars are real, but the share count barely moves. The honest check is simple: pull shares outstanding from five years of filings and see if the number actually fell.

Buybacks also carry a timing problem dividends do not. Companies as a group repurchase most aggressively at cycle peaks when cash is abundant and stocks are expensive, then cut buybacks in crashes when shares are cheap — buying high by institutional design. A high buyback yield executed at 30x earnings destroys the value it claims to return.