Buyback announcements came thick and fast with first-quarter results, with multi-billion dollar programmes from Apple and Alphabet stealing the limelight.
Analysts note a buyback rebound in Europe too, ranging from Maersk and Unilever to Carrefour, which is planning its first in a decade.
Some $360 billion in buybacks were announced in the first four months of 2021, versus $190 billion in the same year-ago period, JPMorgan strategist Nikolaos Panigirtzoglou said.
U.S. buybacks accounted for $300 billion, Panigirtzoglou said, up from $130 billion a year ago.
"We are seeing buyback activity almost doubling relative to 2020. Annualising that, we get a full-year figure of $900 million for the United States which is what we saw in 2019."
The announcements could prove a key source of support for markets, by decreasing the number of a shares outstanding, buybacks boost earnings per share and drive down the price-to-earnings ratio, a valuation measure.
The S&P 500 buyback index is up 22% year-to-date, trumping the main benchmark's 12% gain.
Analysts attribute the buyback rebound to corporate cashpiles that stem from last year's record borrowing and cuts to shareholder rewards. Cumulative holdings of cash and cash equivalents rose by roughly $3 trillion at S&P 500 and STOXX 600 companies, compared to 2019, Refinitiv data shows.
Some banks say European firms, known to favour dividends for returning cash to investors, may also shift to buybacks which are widely credited for driving U.S. equity outperformance.
"A step change in buyback activity would likely encourage U.S. and global investors to re-engage with Europe on the grounds of greater corporate focus on perceived shareholder-friendly activity," Morgan Stanley's Ross MacDonald wrote.
Societe Generale analysts predict European share buybacks at 150 billion euros ($182 billion) in 2022 and 190 billion euros the year after. In 2019, buybacks totalled roughly $100 billion.
JPMorgan's Panigirtzoglou does not, however, expect buybacks to breach the 2018 global record of $1.2 trillion, unless the coming months bring a market correction. Selloffs in 2015 and 2018 prompted companies to snap up newly cheap shares, he noted.
Buybacks generally recover quicker than dividends after a crisis. But while Refinitiv I/B/E/S data shows U.S. dividends fully recovering over the coming year, European payouts are expected at $276 billion, still $40 billion off pre-COVID peaks.
($1 = 0.8235 euros)
(Reporting by Thyagaraju Adinarayan and Sujata Rao; Editing by Alexander Smith)
By Thyagaraju Adinarayan and Sujata Rao