3 Companies Boosting Buybacks While Others Pull Back

Key Points

• Capital One is resuming buybacks after its Discover deal, adding another catalyst for a stock already outperforming the market.
• AutoZone continues to shrink its share count while rising free cash flow and repair demand support long-term growth.
• Apple combines consistent buybacks with steady dividend growth, reinforcing its appeal to both growth and income investors.

Stock buybacks, also known as share repurchases, are common practices for many companies to allocate capital. When a company buys back its own stock, it reduces the number of outstanding shares available, which can raise the stock price if demand stays the same.

Buybacks usually come out of a company’s free cash flow (FCF), which can make them controversial. A company may repurchase its shares for many reasons, including a belief that its stock is undervalued. However, growth-oriented investors may steer clear of these stocks if they view a buyback as a signal that the company’s growth prospects are limited.

During the first half of 2025, share repurchases by S&P 500 companies were very strong. However, the recent earnings season showed that buybacks are slowing. Some of this is due to companies forecasting increased capital expenditures with the prospect of lower interest rates.

That makes this a good time for income-oriented investors to focus on companies that are continuing to increase their share buyback efforts. Not only can this put you in line for some stock price appreciation, but each of these companies is known for paying a safe dividend.

Capital One: Buybacks Return After Discover Deal

Capital One Financial Corp. NYSE: COF stock is up more than 64% in the last 12 months and over 26% in 2025. That more than doubles the performance of the S&P 500 and also makes it one of the strongest stocks in the finance sector.

A key catalyst has been the bank’s acquisition of Discover Financial, which closed in May. Analysts expect the deal to give the company better leverage in negotiating prices with Mastercard and Visa. However, that acquisition was likely one reason the company’s share repurchases, which spiked in the first quarter, returned to its three-year average in the second quarter.

However, management has said it plans to step up stock buybacks in the coming quarter. That could be another catalyst for COF stock, which is trading near its 52-week high. However, since the company’s earnings report in July, several analysts have raised their price targets to levels well above the consensus price target of $238.81.

AutoZone: Consistent Repurchases Drive Long-Term Returns

AutoZone Inc. NYSE: AZO is another company with a strong history of buying back its own shares. That’s significant for a company that has decreased its outstanding share volume by an average of 7.9% in the last three years. Critics will say that this may come at the expense of a dividend, but it’s worth noting that the stock has delivered a total return of over 90% in the last three years.

Increasing free cash flow should give investors looking to purchase AZO stock, which is trading for over $4,000 per share, some reassurance of future growth. Macroeconomic conditions also support that thesis. AutoZone has benefited as inflation and interest rates have pushed the price of new and used vehicles out of range for many consumers. That puts a premium on repairing an existing car, which is likely to be a tailwind into 2026.

AZO stock is trading above its consensus price target. However, since AutoZone’s last earnings report in May, nearly a dozen analysts have weighed in on the stock, with UBS Group issuing the highest price target of $4,925 on September 11.

Apple: Cash-Rich and Committed to Shareholder Value

Apple Inc. NASDAQ: AAPL is another company that reminds investors why cash is king. Apple has been a laggard among the Magnificent 7, over concerns about the company’s artificial intelligence (AI) strategy. The company has also been at the center of the ongoing tariff concerns due to its supply chain, which is heavily reliant on China.

However, AAPL stock continues to be a favorite of buy-and-hold investors and has delivered a total return of over 100% in the last five years. That’s due in part to the company’s history of buying back its stock at a rate of around 4% over the past few years, including buying back 104 million shares in its most recent quarter.

Plus, Apple has a 14-year history of increasing its dividend, which is an indication of how Apple appeals to both growth and income investors.