Cac 40: CAC 40 groups returned more than 98 billion euros to their shareholders in 2024, a record

(BFM Bourse) – According to a study by the specialist letter Vernimmen, residents of the Parisian index returned 98.2 billion euros in cash to their holders last year, a record since the letter carried out this study. Share buybacks fell to 25.5 billion euros while dividends increased.

This is a point that is regularly scrutinized by investors and political leaders: shareholder return. This term brings together the cash available to a company and which it chooses to return to its shareholders, either in the form of dividends or in the form of share buybacks.

Last year, the residents of the CAC 40 decided to return more cash to their shareholders. According to a study carried out by the authors of the letter Vernimmen, Pascal Quiry and Yann Le Fur, professors at HEC, the Parisian index groups returned 98.2 billion euros to their holders in the form of share buybacks and of dividends.

This figure is up 1% compared to 2023 and represents a record since the authors carried out this study, i.e. for 22 years.

It should be noted that the study took as its scope the CAC 40 closed at the end of last December, that is to say with Bureau Veritas and without Vivendi.

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Rising dividends

In detail, it is the dividends which allow the overall amount to increase. In 2024, CAC 40 groups paid coupons for a total of 72.8 billion euros according to the Vernimmen letter, up 8.5% over one year.

Which turns out to be somewhat logical. Most of the dividends paid in 2024 were for the results of the 2023 financial year. However, in 2023, the profits of the CAC 40 increased significantly.

According to a statement from BFM Bourse, CAC 40 companies had generated around 148 billion euros

of net profit group share compared to 140 billion for 2022.

Moreover, the study notes that the distribution rate, that is to say the share of current net income attributed by companies to the dividend, is generally stable, at 42% compared to 41% a year earlier. However, this is one of the lowest ratios observed by the authors.

This rate “is explained by the viscosity of the dividend: in the peak phase of the economy, with the excellent 2023 results, the largest French groups are leaving themselves room to maneuver to maintain it if the 2024 results were to come to a halt , or even weaken,” explain the authors.

Share buybacks decline

Share buybacks fell to 25.5 billion euros in 2024 compared to 30.1 billion euros in 2023. As the authors of the study point out, it is less relevant to compare the amounts on this form of shareholder return from one year to the next as for dividends.

This is because “share buybacks are discretionary and do not imply, unlike dividends, any implicit commitment to recurrence”, they point out.

Companies may well decide to carry out share buybacks after obtaining exceptional proceeds, as in the case of an asset sale. This is what happened in 2023 with BNP Paribas, which bought back 5 billion euros of its own securities. Of this amount, 4 billion euros was linked to the sale of its American subsidiary Bank of The West.

These share buybacks of 4 billion euros have, logically, not been renewed in 2024, BNP Paribas not selling an American subsidiary each year by definition.

Beyond the figures themselves, the authors of the study debunk an idea that they describe as a “sophism” namely that share buybacks raise the price of the companies that launch these programs.

The authors took the 10 CAC 40 residents who have repurchased the most of their own shares since 2012, in proportion to their market capitalization. For example, ArcelorMittal bought back 9.4 billion euros worth of shares, or 50% of its market capitalization over the period. For Totalenergies, the amount amounts to 31.1 billion euros or 22% of its market capitalization.

The authors note that of these 10 groups, four outperformed the CAC 40 over the period while six underperformed it.

Not an enrichment for the shareholder

Let us also remember that dividends and share buybacks do not enrich the shareholder since the company is in reality only redistributing cash that it already has.

“No more than a withdrawal from an ATM has ever enriched you, dividends and share buybacks have never enriched shareholders,” summarize the authors of the study. What enriches the shareholder is not the dividend or the buyback of shares but the results, they point out.

In this sense, for companies to reach maturity, it is “healthier” to return liquidity “to their shareholders, rather than wasting it on overinvestments or idle investments of cash, and thus depriving other shareholders of equity. groups who need it to develop”, explain the authors of the study.

This does not prevent dividends and share buybacks from regularly finding themselves in the crosshairs of public authorities. The Barnier government had, in its Finance bill for 2025, planned to introduce a tax on share buybacks. Its complex calculation, however, amounted to arriving at a fairly low rate on the amount (we had given an example which resulted in a rate of 0.6%) and the executive only intended to withdraw around 200 million euros in revenue linked to this tax.

The fall of the Barnier government put this measure on hold. The new Prime Minister, François Bayrou, could however resume this tax on share buybacks in his draft Budget. The head of government will deliver his general policy speech this afternoon.