Warren Buffett calls those who oppose buybacks “financially illiterate.” There is also opposition to buybacks, but as long as cash flow remains strong Wall Street continues its love affair with dividends and buybacks. 2022 is a record year for dividends and buybacks for S&P 500 companies: Buybacks: $930 billion (up 5.5% year-over-year) Dividends: $564 billion (up 6.4% year-over-year) Source: S&P Global It looks like this will continue into 2023 Occidental Petroleum on Friday announced a 38% dividend increase (to $0.18 from $0.13). Occidental doesn’t pay a huge dividend (currently just 1.2%), but it’s part of a larger trend of increasing dividends and buybacks starting again in 2022. At the same time, Chevron said it’s raising its annual buyback rate to $ 17.5 billion in the second quarter; previously it was $15 billion. It follows up on the announcement at the end of January, when it said it would buy back $75 billion over the next few years. If fully implemented, this would amount to approximately 20% of the outstanding stock. We don’t have data for 2023 yet, but Howard Silverblatt of S&P Global told us, “I’m looking at $1 trillion to buy back the S&P and increase the dividend in the mid-digits.” One trillion buybacks will increase by about 7% and will be the first buybacks to reach the $1 trillion mark. That, along with a mid-single-digit increase in dividends, will keep the trend of returning large amounts of cash to shareholders intact.