Buyback activity edged down a little last week with 14 companies announcing buybacks. We saw several announcements that exceeded a billion dollars. The $5 billion buyback announcement by Johnson & Johnson (JNJ) and the $10 billion additional buyback by Comcast Corporation (CMCSA) were significant. This is the second $10 billion buyback Comcast has announced this year. The prior one was announced in January representing around 5% of its market cap at announcement. The cable operator has been consistently buying back its shares. In the last decade, the company has reduced its shares outstanding by about 15%. For Q2 2022 revenue increased 5.1% to $30 billion, adjusted EBITDA increased by 10% to $9.8 billion and adjusted EPS increased by 20% to $1.01 per share. Free cash flow exceeded net income in Q2 and came in at $3.89 billion. Despite the company’s speed advantage, it has competition from new entrants like SpaceX’s Starlink satellite internet service as well as strong competition on the content side. Comcast’s net debt of $92 billion also gives me pause even though it is well covered by the company’s strong cash flows.
The buyback that stood out last week was the $15 billion buyback announced by the semiconductor company, Texas Instruments (TXN). The buyback was announced on September 15 and represents around 10% of its market cap at announcement. This is in addition to $8.2 billion remaining under the previous authorization.