Record $3.6 Billion Buybacks Signal Shift in Corporate Strategy

Highlights:

• ASX 300 companies to return a record $3.6 billion via buybacks this month, more than double last year’s figure.
• News Corp (ASX: NWS), Telstra (ASX: TLS), and Light & Wonder (ASX: LNW) lead with major repurchase programs.
• Dividends dip 2% to $34b, though gold miners such as Evolution Mining and Northern Star buck the trend with increases.

Surge in Share Repurchases

Australia’s largest listed companies are set to return $3.6 billion to shareholders this month, marking a record high for buybacks. At the time of writing, new announcements from 18 companies in the S&P/ASX 300 Index more than doubled last year’s $2.8 billion from just 10 companies, according to MST Marquee data. Leading the wave, News Corp (ASX: NWS) launched a $1.5 billion buyback, followed by Telstra Corporation (ASX: TLS) with $1 billion and gaming giant Light & Wonder (ASX: LNW) at $758 million. Analysts say these moves reflect a cautious approach toward mergers and acquisitions, with buybacks viewed as a safer way to boost shareholder returns.

Analysts Welcome the Trend

“Buybacks are generally a sound capital management tool, provided they don’t strain the balance sheet,” said Jason Kururangi, portfolio manager at Milford. MST Marquee’s Hasan Tevfik described the record buybacks as one of the more positive signals during the recent reporting season, despite companies forecasting weaker earnings per share for the third consecutive year.

Tevfik added that buybacks could remain strong as long as companies maintain healthy cash positions. Pressure from shareholders under the two-strikes rule, which raises the risk of board spills, has also encouraged boards to pursue repurchases as a way to lift share prices.

Dividends See Slight Dip

While buybacks are soaring, dividends have softened. September payouts from the top 200 companies are expected to fall 2% to $34 billion, driven by reductions from major resource firms such as Fortescue, BHP, Rio Tinto, and Woodside. Still, 64% of companies raised dividends, with gold producers like Evolution Mining and Northern Star standing out. Overall, MST estimates $91 billion in dividends will be paid by ASX 200 companies in 2025, with Commonwealth Bank and BHP leading distributions.

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