Here's why not all buybacks are created equal

A Lockheed Martin F-35
Simon Dawson | Bloomberg | Getty Images
A Lockheed Martin F-35

Another day, another stock buyback announcement.

Defense contractor Lockheed Martin is one of the latest to join a parade of companies announcing major stock buyback programs. The company said Thursday it would buy back an additional $2 billion to its existing stock buyback program, which had $2.3 billion remaining. That follows other high-profile stock buyback announcements earlier in the week from Target, which added $5 billion to its program, and the headline-grabbing, renewed $40 billion buyback program from software and cloud-computing giant Microsoft.

These massive buyback programs may suggest corporate earnings will grow even more because companies are reducing the number of shares they use to calculate their earnings per share. But not all buybacks have the same relative impact on actual returns to shareholders, based on CNBC's analysis of data from S&P Dow Jones Indices.

The biggest ones

When it comes to stock buybacks, it's no secret who the biggest ones are.

Stock market aficionados will often look straight to companies like a Microsoft, General Electric and of course the biggest stock repurchase of them all, Apple. According to S&P Dow Jones Indices Senior Analyst Howard Silverblatt, those three companies have bought back the most of their stock, in dollar terms, in the 12 months ended June of this year.

Microsoft ranks third when it comes to S&P 500 companies that have spent the most on buybacks, shelling out close to $16 billion. General Electric has spent a little over $16 billion during that time span. And then there's Apple, which spent just shy of $37 billion.

While those companies have spent the most in dollar terms, the massive market values for each means that on a percentage basis, their purchases as a percentage of market value are relatively smaller.

The biggest impact

When it comes to the biggest impact of stock repurchase programs on shrinking share count, it's a very different list of companies.

Three members of the S&P 500 have reduced their share count by a fifth or more in the 12 months ended June of this year. American Airlines reduced its share count by 20 percent. Tax preparation giant H&R Block did a similar size reduction. And construction and engineering services company Quanta Services tops the list of biggest share count reductions, with a drop of nearly 27 percent.

Share count reduction through stock buybacks is the tailwind for earnings per share growth as we wind down second-quarter earnings season and get ready to kick off third-quarter earnings season, which starts mid-October.

Now that the Federal Reserve has telegraphed to the markets that interest rates are likely to stay lower for longer, traders and investors can expect to see buybacks continue to be part of that earnings growth story. So while a lot of people will focus on the massive size of certain buyback authorizations and cash spent, it may be worth looking at which companies are spending enough money on buybacks to really impact earnings per share growth.

As CNBC's analysis found, those stocks aren't necessarily the same.

Of course, if and when interest rates really do start on an upward trajectory, the whole buyback story could change, but not many on Wall Street are holding their breath.