Companies with record dividends and buybacks

Companies can pay dividends or purchase back stock to recompense their shareholders in one of two ways. A growing number of blue chips, or well-established businesses, are combining the two. Dividends and stock buybacks are a powerful combination that can enhance shareholder returns dramatically. The main differentiator between dividends and stock buybacks is that dividends represent a certain current return that will be taxed, but a stock buyback represents an uncertain future return on which tax will be deferred until the shares are sold.

Dividends and stock buybacks can both serve to boost the overall interest on a company's stock. However, there is substantial dispute about which technique of distributing cash to shareholders is better in the end for investors and the companies involved.

Here’s a list of companies with record dividends and buybacks in 2022:

1.     Chevron, raises buyback: Chevron Corp (CVX.N), a major U.S. oil and gas company, announced a plan on Tuesday to increase stock buybacks and grow oil output through 2026, bolstering long-term supplies in a tight market. The announcement, which is part of Chevron's previously announced investor outlook, comes amid tightening oil supplies, and prices are rising as a result of countries imposing sanctions on Russia for its invasion of Ukraine. By 2026, the country's second-largest oil producer intends to output "far above" 3.5 million barrels of oil and gas per day (boepd), up from 3.1 million boepd last year, according to Wirth. From $3 billion to $5 billion in previous years, the business now aims to buy back between $5 billion and $10 billion in shares per year. With oil prices at $50 per barrel, the initiative would be viable for five years, according to Wirth.

According to equities research company Jefferies analysts Giacomo Romeo and Jamie Franklin, the buyback hike was "ahead of expectations" and "is the main positive" important takeaway from Chevron's annual update to investors.

2.     Kohl’s, doubles dividends, adds to buyback: Kohls stock (NYSE: KSS) rose 3% in Tuesday's premarket trading as the retailer's 2022 guidance beat expectations, indicating that its efforts to appeal to a younger audience are gradually paying off. By 2023, the firm will have opened 850 'Sephora at Kohl's' stores, attempting to establish the brand as a beauty hub. Customers can browse a variety of high-end beauty, and fragrance brands at these locations. According to Reuters, the corporation used reduced marketing and curtailed some of its low-performing private label brands during the quarter to protect earnings from rising freight costs. The corporation has increased its yearly dividend and plans to buy back up to $3 billion in stock. This involves a $1 billion program in 2022, with $500 million coming from a second-quarter accelerated program. Kohl's estimates adjusted profit per share to range from $7 to $7.50 this year, with revenue expected to rise by 2% to 3%. The company had an adjusted EPS of $7.33 last year on revenue of almost $19 billion. Total revenue increased by around 6% to $6.5 billion in the fourth quarter. Adjusted earnings per share (EPS) dropped 2 cents to $2.20.

3.     Wendy’s, $100M buyback: Wendy's (WEN +1.8%) has announced that it has reached an agreement with Morgan Stanley for a $100 million expedited share buyback. About 4.05 million shares are covered by the buyback agreement. Wendy's Co. has long been credited with its success because to its "traditional" image, but it is forward thinking that is securing its future. Last year, the Dublin-based fast service restaurant business increased its global revenues by 9.8% to $12.5 billion, with another $1 billion expected in 2022. Though the company's famous "fresh, never frozen" burgers and inventive chicken and salads remain the company's heart, new efforts continue to propel it forward. Wendy's (Nasdaq: WEN) recorded a net profit of $200.4 million on $1.9 billion in sales for the year. In 2020, those figures were $117.8 million and $1.7 billion, respectively. For the year, adjusted earnings per share were 82 cents, up from 57 cents in 2020.

4.     Hostess Brands, $150M buyback: Hostess Brands, Inc. (NASDAQ: TWNK) expects double-digit earnings growth in 2021, thanks to soaring profits in the fourth quarter. Hostess is forecasting revenue growth of 6% to 11% in 2022, according to its projections for the year. Net income for the fiscal year ended December 31, 2021, was $119.3 million, or 91 cents per share on common stock, up 10% from $104.68 million, or 84 cents per share, in 2020. The company's net income for the year was $1.14 billion, up 12% from $1.02 billion the previous year. Hostess shares surged to a new 52-week high of $22.72 in early Nasdaq trading on Tuesday, up almost 5% from the Feb. 28 close of $21.54. At its Investor Day Presentation, Hostess Brands said that its Board of Directors has approved a $150 million stock repurchase program, which would replace its prior program and assist shareholders earn a higher return.