When it comes to share buyback authorizations, not all programs create equal value. A $1 billion repurchase program can have a very different impact depending on the size of the company authorizing it.
The greater the value of the buyback program compared to the size of the company, the more positive an impact it could have on earnings per share (EPS).
Thus, looking at the size of a company’s total buyback capacity versus its overall value helps determine how significant an impact buybacks could have on the share price. Below are three firms that now have buyback capacity equal to close to 10% or more of their market capitalization. This percentage is large and could have a significant positive impact on shares.
However, it is important to note that just because a company plans to buy back shares doesn’t automatically mean shares will rise. All figures below use data and prices as of the Feb. 24 market close unless otherwise indicated.
1. Fiserv: Big-Time Buyback Capacity With a History of Utilizing It
First is payments company Fiserv (NYSE:FI). The company recently announced a buyback authorization of 60 million shares, in addition to any other repurchase authorization still outstanding. On its Feb. 5 earnings call, Fiserv executives announced that they ended 2024 with 18 million shares in buyback authorization. Thus, the firm’s total buyback capacity is approximately 78 million shares now.
Although most companies quote their buybacks in dollar figures, investors can calculate the dollar figure with some quick math.
Multiplying 78 million by Fiserv’s share price of $232 puts the value of its buyback capacity at over $18 billion. With a market cap of $130 billion, the company’s buyback capacity is large, equal to nearly 14% of its value.
Fiserv has a strong history of actually using the buyback capacity it has authorized. In 2024, the company spent $5.5 billion on repurchases. That figure has been rising steadily since 2022. That year, the company only repurchased $2.5 billion worth of shares. This is an increase in buyback spending of 120%.
It moderately outpaces the 103% rise in Fiserv shares from the end of 2022 to the beginning of 2025. This indicates that the firm is continuing to aggressively repurchase shares despite the strong rise in its stock price.
2. Analog Devices: Chip Stock With Large Buyback Capacity and Notable Tech Dividend Payer
Next up is Analog Devices (NASDAQ:ADI). The semiconductor company recently announced a new buyback program of $10 billion. This brings its total buyback capacity to approximately $11.5 billion. Compared to its market cap of over $117 billion, the company’s repurchase capacity is equal to 9.8% of the firm’s value.
In addition to adding substantial buyback capacity, the firm also announced a substantial increase to its dividend of 8%. This gives Analog an indicated dividend yield of nearly 1.7%.
Although that’s not impressive compared to many firms, this yield is strong compared to firms in its sector and industry.
Compared to U.S. large-cap tech stocks, this yield is among the top 20 largest. When looking at U.S. large-cap semiconductor stocks, it is in the top six.
Analog Devices uses its buyback capacity much more slowly than Fiserv. Over the past 21 years, Analog has repurchased an average of $760 million worth of shares each year.
However, this slower pace could be a sign that the firm is more selective in repurchasing shares. For example, repurchasing shares when the company’s value is lower can mean that each dollar spent goes further.
3. Allison Transmission: Strong Buyback Capacity Stock Achieving Record Revenue and Earnings
Last is Allison Transmission (NYSE:ALSN). The company recently announced an additional $1 billion share buyback authorization. This brings its total buyback capacity to $5 billion.
With a market capitalization of $8.4 billion, this capacity equates to a massive 59% of the firm’s value.
In 2024, the company spent more than $250 million on buying back shares. While low compared to its current capacity, this pace is significant compared to its relatively low market cap.
Allison may not be a typical high-flying stock, yet it has posted an impressive total return of 163% over the last three years. That is over three times higher than the total return of the S&P 500 over that period and the highest return of the firms on this list.
In 2024, Allison reported record full-year sales of $3.2 billion and record diluted EPS of $8.31. These numbers increased by 6% and 12% compared to 2023, respectively.