Australian investors love ASX 100 companies that regularly conduct share buyback programs. And for good reason.
Share buybacks may not represent the obvious returns that a dividend does. There's no cash that arrives in one's bank account after all. However, share buybacks can be just as lucrative for investors, perhaps even more than a dividend.
When a company initiates a share buyback, it uses its own cash to purchase its own stock from the share market. After buying the shares, the company cancels them.
This has a few flow-on effects. For one, it usually results in a higher share price for the company, as, under the laws of supply and demand, a reduced supply of the shares will theoretically result in an increase in price.
It also means that a company has fewer shares to split its earnings between, leading to an automatic increase in earnings per share (EPS). Paying out dividends is also cheaper for the company, as again, there are fewer shares to split the dividend between.
Finally, share buybacks increase the ownership of existing investors without requiring additional purchases. To illustrate, if you own 10 shares of a company with 100 shares outstanding, you own 10% of said company. But if that company buys back 10 other shares off the market, you now own 10 out of 90 shares instead of 100. That means your ownership has risen from 10% to 11.1% without you having to lift a finger.
Unlike a dividend, none of these consequences of a share buyback require you to pay additional taxes. As such, many investors, including Warren Buffett, tend to prefer buybacks to dividends.
Today, let's check out this process in action by taking a look at 3 S&P/ASX 200 Index (ASX: XJO) shares that are currently running share buyback programs.
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3 ASX 100 companies currently undertaking share buybacks
South32 Ltd (ASX: S32)
ASX 100 mining stock South32 is first up. This diversified miner is a regular buyer of its own shares, with ASX announcements revealing the company has been enthusiastically snapping up stock over April.
In South32's February half-year earnings, the company revealed that it had US$171 million remaining in its buyback fund to be used by 12 September. With the South32 share price now hovering at a four-year low, the company is certainly making hay while the rain pours.
Whitehaven Coal Ltd (ASX: WHC)
Next, we have another resource company in energy stock, Whitehaven Coal. Like South32, ASX announcements reveal that Whitehaven is another company that isn't sitting on its laurels, with nine buyback notices posted in May alone.
In its February earnings report, Whitehaven confirmed that it would resume share buybacks after a hiatus. Over the six months to August 2025, Whitehaven has budgeted spending up to $72 million on its own share purchases.
Westpac Banking Corp (ASX: WBC)
Finally, a famous ASX 100 share in the big four bank stock, Westpac, rounds out our list. Westpac is famous for its sizeable, fully franked dividends, but it is no slouch when it comes to share buybacks, either.
Again, these have been frequent in recent weeks, with Westpac issuing multiple buyback notices over just this month.
Back in November 2023, the bank announced that it would be spending a whopping $1.5 billion on share buybacks going forward. As of the bank's earnings that were dropped earlier this month, Westpac had 31% (or ~$465 million) of that $1.5 billion remaining in the buyback kitty (as of 31 March).
