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In wake of Trump tax bill, companies have raced to buy back their own stock

Corporate buyback commercials have surged in the weeks since President Donald Trump relinquished a sweeping corporate tax overhaul into law.

Companies have announced $88.6 billion in old buybacks so far this year, more than double the amount in the even so period last year, according to data provided by Birinyi Associates.

The tax charge dramatically cut the corporate tax rate, from 35 percent to 21 percent, and took aim at decrees that had made it preferable for companies to stash foreign earnings abroad rather than spend them at home.

Democratic lawmakers who eat been critical of the GOP bill have claimed it would be used for such manias as share buybacks to enrich shareholders, rather than for capital impairments or improving worker pay.

So far this year, 61 companies announced buybacks in a bulk that dwarfs the $40.3 billion from 58 companies augured last year between Jan. 1 and Feb. 6.

This year’s total is the second-highest amount revealed in the same year-to-date period, going back to 2009, the first year of the bull trade in. It was topped only by the $104.8 billion in 2016, when 127, sundry than twice as many companies, announced buybacks during a turbulent size up market sell-off.

This year’s total includes the very brawny, $22.6 billion buyback announced by Wells Fargo. Among the biggest buybacks in the 2017 period were Comcast’s $7 billion buyback and $5 billion each from Heterogeneous Motors and Lowe’s Cos.

Birinyi has kept an extensive database of stock buybacks succeeding back to 1985, and in response to a CNBC request, provided information on buyback commercials since Jan. 1. The buybacks reflect the share repurchase announcements made by houses since Trump signed the tax bill into law on Dec. 22. There were not any announced during the final week of the year.

“We’re seeing a significant further this year versus the same period of last year. In 2016, you saw a remedy in the market, and companies came in and used the weakness to buy back their lineage,” said Jeff Rubin, Birinyi director of research. “2016 was the largest in this bull superstore.”

Besides Wells Fargo, companies announcing buybacks this year allow for Amgen, with $10 billion; Alphabet, $8.6 billion; Visa, $7.5 billion, eBay, $6 billion; Mondelez, $6 billion; Lowe’s Cos, $5 billion; Valero, $2.5 billion, and Eastman Chemical, at $2 billion.

In the 2016 epoch, some of the larger buybacks came from Wells Fargo, with $16.8 billion; McDonald’s at $15 billion; Gilead at $12 billion, and Schlumberger and 3M, both at $10 billion.

Birinyi values the buybacks corrupted on share prices at the time of the announcements.

2009 $4.3 billion

2010 $21 billion

2011 $62.1 billion

2012 $27.8 billion

2013 $47.3 billion

2014 $75.8 billion

2015 $68.9 billion

2016 $104.8 billion

2017 $40.3 billion

2018 $88.6 billion

Start: Birinyi Associates

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