Warren Buffett calls those who oppose acquisitions “financial illiterate”. There may be opposition to stock buybacks, but as long as cash flow remains strong, Wall Street continues its favorite relationship with dividends and stock buybacks. 2022 is a record year in terms of both dividends and buybacks for S&P 500 companies: Buybacks: $930 billion (up 5.5% year over year) Dividends: $564 billion (up 6.6 percent). 4% y/y) Source: S&P Global Looks like this is continuing into 2023. Occidental Petroleum on Monday announced that it is increasing its dividend by 38% (to $0.18). from $0.13). Occidental doesn’t pay a big dividend (currently just 1.2%), but it’s part of a trend of bigger dividend and buybacks starting again in 2022. At the same time, Chevron said it’s growing. annual acquisition rate to $17.5 billion in the second quarter; before it was 15 billion dollars. That followed its announcement in late January, when it said it would buy back $75 billion over the next few years. If fully implemented, that number would represent about 20% of the outstanding shares. We don’t have the data for 2023 yet, but Howard Silverblatt from S&P Global told me, “I’m looking for $1 trillion in S&P buybacks and average dividend growth. one digit.” $1 trillion in buybacks would grow by about 7% and would be the first time that acquisitions hit the $1 trillion mark. That, coupled with an average single-digit dividend increase, should keep to the trend of returning large amounts of cash to shareholders.