2021 dividends and buybacks are near record highs

Sources: Pavilion Global Markets, S&P Global, and Wells Fargo Investment Institute. Annual data from January 1, 2000 to December 31, 2021. Dividends value, buybacks value, and free cash flow value are based on the S&P 500 Index. The S&P 500 Index is a market-capitalization-weighted index considered representative of the U.S. stock market. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. YOY = year over year. Investing in stocks involves risk and their returns and risk levels can vary depending on prevailing market and economic conditions.

Key Takeaways

  • Dividends and buybacks fell in 2020 as companies prioritized expenditures and protected liquidity reserves, but rebounded to near record levels in 2021.
  • Dividends and buybacks likely will become a larger proportion of total return as price returns normalize with less monetary support.