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It’s been raining stock buybacks on Wall Street this year, and the outlook appears to be for another downpour in 2019.

Buybacks appear to be nearing a crescendo, with total U.S. stock repurchase announcements crossing the $1 trillion mark in mid-December for the first time, according to Michael Schoonover, the portfolio manager of the Catalyst Buyback Strategy fund (ticker: BUYIX). “There’s been a significant pickup in recent weeks,” with markets in a downdraft, he adds.

The 17% drop in the S&P 500 so far in the fourth quarter has emboldened buyback activity. And it probably doesn’t hurt that the bull market rally is—however delicately poised above the bear market level—still alive.

Announcements reached $1.08 trillion, with nearly half concentrated in 19 companies, which account for $460 billion of the total. Some of those are listed in the nearby table. Despite the record-setting buyback authorization levels, 2018 has been an unusual year in that fewer companies are accounting for the total buybacks, he says.

The $1 trillion refers to announcements of what are typically multiyear buyback programs. Yet companies are actually walking the walk, too. That is, actual buyback levels are at record levels. This week, S&P Dow Jones Indices said that preliminary third-quarter repurchases rose nearly 60% to a record $203.8 billion, the third consecutive quarterly record. For the first nine months, buybacks are up 53% to $583.4 billion, 1% below the previous full-year record of 2007. The comparison to 2007 might give some investors pause as buybacks shatter records again. Schoonover estimates that actual repurchases this year will probably be roughly $700 billion to $750 billion.

Buybacks Everywhere It's a banner year for buybacks, with a record $1 trillion in announcements so far this year, with a third concentrated in the nine companies listed below. Some $200 billion in actual buybacks were effected in the third quarter, also a record. Source: Catalyst Capital Advisors

In a press release, S&P Dow Jones Indices said that the number of stock issuers which have reduced share counts at least 4% this year rose to 17.7% from 15.4% in the second quarter.

Additionally, dividends from S&P 500 companies totaled $115.7 billion, a new high, up 3.7% from $111.6 billion in the second quarter.

”Companies have used their tax savings to push up discretionary buybacks and boost earnings through significantly reduced share counts,” says Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Buybacks tend to increase earnings per share by lowering the share count.

The buybacks this year and those to come are part of a larger pattern of rising repurchase activity that has been one of the biggest supports to the nearly 10-year old bull market rally, one in which the individual investors haven’t really participated to the same extent as they have in previous bull markets.

Moreover, Schoonover says that in 2018 companies were using much of the cash from tax reform and repatriation to pay bonuses and pay down debt. That’s a positive for buybacks because next year he expects the money to go more to buybacks and $1 trillion in announcements could again be reached.

Additionally, there were a number of very big companies, like Microsoft (MSFT), Procter & Gamble (PG), Home Depot (HD), and Walmart (WMT) that didn’t announce 2018 buybacks, but may in 2019. In particular, he predicts that Apple (AAPL) will again announce another $100 billion potential share repurchases next year, as it did in 2018.

If there is some resolution in the continuing U.S. trade war with China and others, “you could see a pickup in repurchases from the tech sector and industrials, who were on the sidelines in November,” Schoonover adds.

Market pullbacks encourage companies to buy back stock, though in bear markets and recessions managements are often too cautious to repurchase stock. Hence, corporate boards are notorious for poor timing, often buying back a lot of stock at what turns out to be market highs.

Yet it’s during bear markets, when stocks are at their lows, that companies can get the most bang for their buck in buybacks. Still, Schoonover says 2019 is poised to be another strong year for buybacks, especially if some of the market headwinds subside.

Write to Vito J. Racanelli at vito.racanelli@barrons.com