The four indexes above are weighted by market cap. On an unweighted basis, the 125 companies without buybacks have a median return of minus 5.1 percent — better than the median minus 6.4 percent return for companies that both reported buybacks and a reduction in shares outstanding.
The 100 companies with the highest buybacks as a percentage of market cap have a median return that is even worse at minus 9.5 percent in the last year. These companies include Big Lots, Hewlett-Packard, Macy's, Xerox and Kohl's.
That effect, of course, could be due to any number of other economic forces independent of a company's decision to do buybacks. But it does point to what many market watchers have warned about in recent years: that the recent enthusiasm for stock repurchase programs could come at the cost of future growth.
Stock buybacks have become a popular vehicle for returning excess cash (or in some cases, borrowed cash) to shareholders, without the commitment usually associated with a dividend. While they can be a good strategy if management thinks the company's shares are undervalued, buybacks also mean less money left for companies to use on capital expenditures and other investments.