Welcome to edition 2 of Buyback Wednesdays, a new weekly series of articles we launched on Inside Arbitrage last week to track the top stock buyback announcements during the prior week. We have been tweeting about buybacks for several months and decided to start writing about them in a weekly article to provide more context.
A home builder topped the list of buybacks this week with KB Home announcing the authorization of a $300 million stock repurchase that represented nearly 11% of its market cap at announcement. This follows a $1 billion additional buyback announced on February 1, 2022 by PulteGroup (PHM) representing 7.4% of the company’s market cap at announcement and a $500 million buyback by NVR (NVR) on February 16, 2022, which is a continuation of its repurchase program that began in 1994. It is not surprising that NVR has the best return on equity and trades at a premium compared to its peer group.