Bank of America Stock Buybacks and Shareholder Benefits

Bank of America has a long history of buying back its own stock, with a total of $143 billion spent on repurchases between 2009 and 2019. This strategy has helped boost shareholder value and returns.

By reducing the number of outstanding shares, Bank of America can increase earnings per share, making its stock more attractive to investors. For example, in 2019, the bank's buyback program helped boost EPS by 12%.

Bank of America's buyback program has also helped the bank return capital to shareholders. Between 2009 and 2019, the bank returned over $80 billion to shareholders through buybacks and dividends.

Consider reading: How Does Apple Stock Buyback Work

Bank of America has been clear about its goal of buying back as much of its outstanding common stock as possible, with Chairman and CEO Brian Moynihan doubling down on this point in his latest shareholder letter.

The bank has spent billions of dollars each year buying back its stock, with $5.1 billion spent in 2016 alone. This was enough to repurchase 332,750 shares of stock.

Intriguing read: Bank of America Cash Credit

Bank of America's buybacks are especially valuable given its low share price, which trades at the third lowest valuation among large-cap bank stocks. This means the bank gets a good deal when purchasing shares.

Warren Buffett, chairman and CEO of Berkshire Hathaway, has expressed his support for Bank of America's buyback policy, saying that repurchased shares have been underpriced in most cases.

Bank of America has reduced its share count by 6% over the past four years, with a total of $12.4 billion spent on common stock repurchases. This is a significant step towards Moynihan's goal of steadily repurchasing the 7 billion shares issued during the financial crisis.

Take a look at this: What Are Stocks and Shares

Bank of America has been clear about its goal of buying back as much of its outstanding common stock as possible, with Chairman and CEO Brian Moynihan stating that the bank is focused on steadily repurchasing the 7 billion shares it issued during the financial crisis.

In 2016, Bank of America spent $5.1 billion on buybacks, which was enough to repurchase 332,750 shares of stock. Over the past four years, the bank has spent a total of $12.4 billion on common stock repurchases.

Bank of America's shares trade at the third lowest valuation among large-cap bank stocks, making buybacks a valuable strategy for the bank. It's like buying low and selling high - but instead, the bank is buying its own shares at a low price to increase shareholder value.

Warren Buffett, one of Bank of America's largest shareholders, has expressed his support for the bank's buyback policy, saying that repurchased shares have been underpriced and that shrinking the number of outstanding shares can lead to good things for shareholders.

Explore further: Why Are Stock Buybacks Bad