S&P 500 buybacks reverse declines in Q3 2019; expenditures remain lower than the 2018 levels

    Author StockStreetNewsPosted on Categories Press ReleaseTags , , , , ,

    This Post Was Syndicated Under License Via QuoteMedia

    – Q3 2019 share repurchases reached $175.9 billion – 6.3% higher than Q2 2019, 13.7% lower than Q3 2018, and 21.1% lower than the record Q4 2018. – Apple continues to lead, spending $17.6 billion – down from last quarter’s $18.2 billion, but still the 8th highest expenditure historically. – Buybacks remain concentrated with the top 20 companies accounting for 50.4% of the total, the same as Q2 2019. – Buybacks for the 12-month period ending in September 2019 were $770.1 billion – down from $798.0 billion in Q2 2019, but up 6.9% from the same period last year, of $720.4 billion. – Buyback impact remains broad as 22.8% of the companies used buybacks to reduce their share count by at least four percent and increase their EPS.

    NEW YORK, Dec. 17, 2019 /PRNewswire/ — S&P Dow Jones Indices (“S&P DJI”) announced today that preliminary Q3 2019 S&P 500® stock buybacks, or share repurchases, were $175.9 billion – a 6.3% increase over Q2 2019’s $165.5 billion. This was the first increase after two consecutive quarters of declines since the record $223 billion in Q4 2018.

    Historical data on S&P 500 buybacks are available at www.spdji.com/indices/equity/sp-500. 

    Key Takeaways:

    • Companies reversed declines in buyback expenditures in the past two quarters of this year, posting a 6.3% gain over Q2 2019, as the current level remains significantly higher than 2017 and prior periods. The cumulative rolling four quarters of repurchases continued to impact EPS, as 22.8% of the issues reduced share counts by at least 4% year-over-year, the same level as Q2 2019, but up from the Q3 2018’s 17.7%. Over 1-in-5 issues saw at least a 4% EPS tailwind and at this point 14.6% of the issues already have at least a 4% tailwind built into Q4 2019.
    • S&P 500 Q3 2019 dividends set a quarterly record, increasing to $123.2 billion, up 6.4% from the Q3 2018 $115.7 billion; Q4 2019 is set to post yet another record, in the $126 billion range.
    • Total shareholder return of buybacks and dividends for the quarter came in at $299.0 billion, up 5.2% from the Q2 2019 period expenditure of $284.1 billion and down 6.4% from the $319.5 billion reported for Q3 2018.
    • Total shareholder return for the 12-month period ending September 2019 declined to $1.249 trillion from the 12-month June 2019 level of $1.270 trillion, and was up 7.1% from the year-over-year 12-month Q2 2018 level of $1.166 trillion.

    “After lowering expenditures in the first half of the year from their tax-inspired record-setting buying spree of 2018, companies increased their share repurchases by 6.3% in the third quarter,” said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.  “While the levels still pale in comparison to 2018, they are significantly higher than the pre-2018 levels, and surpass the hoped for $170 billion mark, which was seen as the level needed to support stocks and continue reduced share count EPS growth. For Q4, the market is looking for another increase in buybacks, in the mid-single digit range, staying near the $190 billion level, well shy of the Q4 2018 record-setting $223 billion.”

    Silverblatt also found that buybacks continue to be top heavy, with the top 20 issues accounting for 50.4% of the buybacks, compared to the 10-year average of 44.5%. 

    Q3 2019 GICS® Sector Analysis:

    Information Technology buybacks continued to decline as a percentage of all buybacks, as they decreased 10.8% to $49.2 billion compared to $55.2 billion for Q2 2019. Twelve-month expenditures were down 7.6% to $233.7 billion from the $253.0 billion spent in the same period in 2018. The sector represents 28.0% of the index’s buybacks, down from Q2 2019’s 33.4% and 40.4% in Q3 2018.

    Financials were right behind Information Technology for expenditures, as they increased 26.4% to $47.8 billion, up from last quarter’s $37.8 billion. They represented 27.2% of all buybacks, up from 22.9% in Q2 2019, and are less than one percentage point away from Information Technology’s 28.0%.

    Materials buybacks continued to be volatile, as they increased 123.1% after declining 49.3% last quarter, spending $5.4 billion on buybacks, up from $2.4 billion last quarter and down from $4.8 billion for Q1 2019. Utilities again declined, spending 11.1% less, to $0.8 billion from last quarter’s $0.9 billion and $1.5 billion in Q1 2019.

    Health Care buybacks declined 6.2%, to $16.0 billion, from last quarter’s $17.1 billion, as they represent 9.1% of all buybacks, down from last quarter’s 10.3%. 

    Issues:

    The five issues with the highest total buybacks for Q3 2019 are:

    • Apple (AAPL) continued to lead in buybacks, spending $17.6 billion in Q3 2019, ranking 8th in S&P 500 history, as the level was down 2.9% from their Q2 2019 $18.2 billion expenditure. Over the past 12-months, Apple has spent $69.7 billion on buybacks, down from $75.3 billion in the prior 12-month period. Over the five-year period they have spent $247.8 billion, more than the market value of Home Depot.
    • Bank of America (BAC): $7.6 billion for Q3 2019, up from $6.5 billion for Q2 2019; in the last 12-months they spent $25.6 billion, up from $19.7 billion.
    • Wells Fargo (WFC): $7.5 billion for Q3 2019, up from their $4.9 billion Q2 2019 expenditure; in the last 12 months they spent $24.7 billion, up from $16.5 billion.
    • JP Morgan (JPM): $6.9 billion for Q3 2019, up from the $5.2 billion spent in Q2 2019; in the last 12-months they spent $23.2 billion, up from $18.9 billion.
    • Alphabet (GOOG/L): $5.7 billion for Q3 2019, up from $3.6 billion for Q2 2019; in the last 12-months they spent $14.9 billion, up from $8.5 billion.

    For more information about S&P Dow Jones Indices, please visit www.spdji.com.    

    S&P Dow Jones Indices

    S&P 500, $ U.S. BILLIONS

    (preliminary and estimates in bold)

    PERIOD

    MARKET

    OPERATING

    AS REPORTED

    DIVIDEND &

    VALUE

    EARNINGS

    EARNINGS

    DIVIDENDS

    BUYBACKS

    DIVIDEND 

    BUYBACK 

    BUYBACK 

    $ BILLIONS

    $ BILLIONS

    $ BILLIONS

    $ BILLIONS

    $ BILLIONS

    YIELD

    YIELD

    YIELD

    12 Mo Sep,’19 

    $24,706.92

    $1,274.15

    $1,106.84

    $478.94

    $770.14

    1.94%

    3.12%

    5.06%

    12 Mo Sep,’18

    $24,579.28

    $1,276.77

    $1,106.65

    $445.96

    $720.40

    1.81%

    2.93%

    4.75%

    2018

    $21,026.90

    $1,281.66

    $1,119.43

    $456.31

    $806.41

    2.17%

    3.84%

    6.01%

    2017

    $22,821.24

    $1,066.00

    $940.86

    $419.77

    $519.40

    1.84%

    2.28%

    4.12%

    2016

    $19,267.93

    $919.85

    $818.55

    $397.21

    $536.38

    2.06%

    2.78%

    4.85%

    9/30/2019

    $24,707

    $330.51

    $282.12

    $123.12

    $175.89

    1.94%

    3.12%

    5.06%

    6/28/2019

    $24,423

    $333.26

    $290.00

    $118.68

    $165.46

    1.93%

    3.27%

    5.20%

    3/29/2019

    $23,619

    $316.56

    $291.82

    $117.33

    $205.81

    1.97%

    3.49%

    5.45%

    12/31/2018

    $21,027

    $293.82

    $242.91

    $119.81

    $222.98

    2.17%

    3.84%

    6.01%

    9/30/2018

    $24,579

    $349.04

    $306.70

    $115.72

    $203.76

    1.81%

    2.93%

    4.75%

    6/30/2018

    $23,036

    $327.53

    $288.55

    $111.60

    $190.62

    1.89%

    2.80%

    4.69%

    3/29/2018

    $22,496

    $311.26

    $281.28

    $109.18

    $189.05

    1.90%

    2.56%

    4.46%

    12/29/2017

    $22,821

    $288.93

    $230.12

    $109.46

    $136.97

    1.84%

    2.28%

    4.12%

    9/29/2017

    $21,579

    $268.35

    $243.68

    $105.45

    $129.17

    1.92%

    2.40%

    4.32%

    6/30/2017

    $20,762

    $261.39

    $231.40

    $104.01

    $120.11

    1.96%

    2.41%

    4.37%

    3/31/2017

    $20,276

    $247.32

    $235.65

    $100.86

    $133.15

    1.98%

    2.51%

    4.49%

    12/31/2016

    $19,268

    $240.11

    $207.93

    $103.82

    $135.29

    2.06%

    2.78%

    4.85%

    9/30/2016

    $18,742

    $247.98

    $219.46

    $98.43

    $112.20

    2.10%

    2.92%

    5.01%

    6/30/2016

    $18,193

    $222.77

    $201.79

    $98.30

    $127.50

    2.14%

    3.22%

    5.36%

    3/31/2016

    $17,958

    $208.99

    $189.37

    $96.67

    $161.39

    2.15%

    3.28%

    5.43%

    12/31/2015

    $17,900

    $201.95

    $163.76

    $99.39

    $145.88

    2.14%

    3.20%

    5.33%

    9/30/2015

    $16,917

    $224.14

    $204.58

    $95.07

    $150.58

    2.22%

    3.30%

    5.52%

     

    S&P Dow Jones Indices

    S&P 500 SECTOR BUYBACKS

    SECTOR $ MILLIONS

    Q3,’19

    Q2,’19

    Q3,’18

    12MoSep,’19

    12MoSep,’18

    5-YEARS

    10-YEARS

    Consumer Discretionary

    $18,372

    $15,764

    $19,688

    $77,509

    $81,798

    $426,508

    $742,619

    Consumer Staples

    $7,509

    $7,114

    $10,025

    $33,997

    $34,351

    $208,836

    $440,792

    Energy

    $4,880

    $4,552

    $7,330

    $22,423

    $26,932

    $88,212

    $264,332

    Financials

    $47,789

    $37,819

    $40,643

    $174,094

    $138,316

    $621,259

    $859,660

    Healthcare

    $16,007

    $17,066

    $14,482

    $95,158

    $93,170

    $410,508

    $699,142

    Industrials

    $14,181

    $16,967

    $15,159

    $73,600

    $66,775

    $354,187

    $556,114

    Information Technology

    $49,241

    $55,187

    $82,293

    $233,713

    $253,044

    $871,620

    $1,373,018

    Materials

    $5,400

    $2,420

    $3,014

    $18,449

    $10,601

    $61,764

    $113,442

    Real Estate

    $694

    $555

    $520

    $3,138

    $3,602

    $10,029

    $10,029

    Communication Services

    $11,028

    $7,132

    $10,092

    $34,061

    $10,690

    $52,070

    $83,086

    Utilities

    $784

    $882

    $509

    $3,994

    $1,119

    $9,142

    $18,756

    TOTAL

    $175,886

    $165,458

    $203,756

    $770,135

    $720,397

    $3,114,135

    $5,160,989

     

    S&P Dow Jones Indices

    S&P 500 20 LARGEST Q3 2019 BUYBACKS, $ MILLIONS 

    Company  

    Ticker

    Sector

    Q3 2019

    12-Months

    12-Months

    5-Year

    10-Year

    Indicated

    Buybacks

    Sep,’19

    Sep,’18

    Buybacks

    Buybacks

    Dividend

    $ Million

    $ Million

    $ Million

    $ Million

    $ Million

    $ Million

    Apple 

    AAPL

    Information Technology

    $17,635

    $69,714

    $75,265

    $247,797

    $320,049

    $14,808

    Bank of America

    BAC

    Financials

    $7,626

    $25,627

    $19,732

    $60,790

    $65,685

    $7,447

    Wells Fargo 

    WFC

    Financials

    $7,459

    $24,757

    $16,518

    $68,966

    $87,356

    $9,877

    JPMorgan Chase 

    JPM

    Financials

    $6,949

    $23,178

    $18,863

    $68,851

    $90,405

    $11,511

    Alphabet 

    GOOGL

    Communication Services

    $5,696

    $14,948

    $8,526

    $31,692

    $32,610

    $0

    Oracle 

    ORCL

    Information Technology

    $5,519

    $31,816

    $21,366

    $74,484

    $105,087

    $4,852

    Citigroup

    C

    Financials

    $4,978

    $12,855

    $15,800

    $53,997

    $57,889

    $4,608

    Microsoft 

    MSFT

    Information Technology

    $4,912

    $20,711

    $11,895

    $74,488

    $116,365

    $15,576

    Intel 

    INTC

    Information Technology

    $4,521

    $11,874

    $8,464

    $34,421

    $65,163

    $5,582

    LyondellBasell 

    LYB

    Materials

    $3,240

    $4,805

    $801

    $15,507

    $21,803

    $1,829

    Procter & Gamble 

    PG

    Consumer Staples

    $3,000

    $6,751

    $5,754

    $24,090

    $53,999

    $7,458

    Charter Communications

    CHTR

    Communication Services

    $2,767

    $5,753

    $7,181

    $22,283

    $23,066

    $0

    Starbucks 

    SBUX

    Consumer Discretionary

    $2,255

    $10,334

    $7,196

    $23,269

    $26,278

    $1,963

    Visa

    V

    Information Technology

    $2,132

    $8,718

    $7,286

    $33,238

    $46,605

    $2,072

    Mastercard 

    MA

    Information Technology

    $1,803

    $6,553

    $5,156

    $21,721

    $30,291

    $1,803

    DaVita

    DVA

    Health Care

    $1,764

    $1,837

    $1,643

    $4,973

    $5,876

    $0

    Facebook

    FB

    Communication Services

    $1,739

    $8,661

    $13,886

    $26,001

    $29,756

    $0

    Johnson & Johnson 

    JNJ

    Health Care

    $1,628

    $10,128

    $2,875

    $35,636

    $60,511

    $10,029

    Morgan Stanley

    MS

    Financials

    $1,538

    $5,633

    $5,664

    $21,297

    $24,020

    $3,045

    McDonald’s 

    MCD

    Consumer Discretionary

    $1,468

    $4,458

    $5,029

    $31,806

    $44,772

    $3,797

    Top 20   

    $88,629

    $309,111

    $258,900

    $975,307

    $1,307,586

    $106,257

    S&P 500

    $175,886

    $770,135

    $720,397

    $3,114,135

    $5,160,989

    $546,855

    Top 20 % of S&P 500

    50.39%

    40.14%

    35.94%

    31.32%

    25.34%

    19.43%

       Gross values are not adjusted for float

     

    S&P Dow Jones Indices

    S&P 500 20 Largest Quarterly Buybacks, $ Millions, as of Q3 2019; Apple added at #8

    $ MILLIONS

    QUARTER

    COMPANY

    SECTOR

    $23,811

    Q1 2019

    Apple

    Information Technology

    1

    $22,908

    Q1 2018

    Apple

    Information Technology

    2

    $21,860

    Q2 2018

    Apple

    Information Technology

    3

    $21,162

    Q2 2006

    QUALCOMM

    Information Technology

    4

    $19,364

    Q3 2018

    Apple

    Information Technology

    5

    $18,154

    Q2 2019

    Apple

    Information Technology

    6

    $18,036

    Q1 2014

    Apple

    Information Technology

    7

    $17,635

    Q3 2019

    Apple

    Information Technology

    8

    $17,319

    Q3 2014

    Apple

    Information Technology

    9

    $16,413

    Q2 2013

    Apple

    Information Technology

    10

    $15,707

    Q3 2007

    International Business Machines 

    Information Technology

    11

    $13,420

    Q3 2015

    Apple

    Information Technology

    12

    $12,852

    Q4 2013

    Johnson & Johnson 

    Healthcare

    13

    $12,318

    Q4 2016

    Allergan plc 

    Healthcare

    14

    $12,183

    Q2 2012

    Johnson & Johnson 

    Healthcare

    15

    $11,480

    Q4 2016

    Apple

    Information Technology

    16

    $11,133

    Q4 2017

    Apple

    Information Technology

    17

    $10,776

    Q2 2016

    Apple

    Information Technology

    18

    $10,724

    Q2 2015

    Apple

    Information Technology

    19

    $10,723

    Q1 2016

    Home Depot

    Consumer Discretionary

    20

     

    S&P Dow Jones Indices

    S&P 500 Q3 2019 Buyback Report

    SECTOR

    DIVIDEND

    BUYBACK 

    COMBINED

    YIELD

    YIELD

    YIELD

    Consumer Discretionary

    1.65%

    3.08%

    4.73%

    Consumer Staples

    3.63%

    1.78%

    5.41%

    Energy

    4.11%

    1.96%

    6.07%

    Financials

    2.35%

    4.83%

    7.18%

    HealthCare

    1.78%

    2.56%

    4.34%

    Industrials

    2.02%

    3.03%

    5.06%

    Information Technology

    1.44%

    3.87%

    5.32%

    Materials

    2.26%

    2.67%

    4.93%

    Real Estate

    3.36%

    0.41%

    3.77%

    Communications Services

    1.53%

    1.49%

    3.01%

    Utilities

    3.17%

    0.46%

    3.63%

    S&P 500

    2.11%

    2.96%

    5.07%

       Uses full values (unadjusted for float)

       Dividends based on indicated; buybacks based on the last 12-months ending Q3,’19

     

    Share Count Reduction (SCR)

    SCR 

    SCR

    (Y/Y diluted shares used for EPS)

    >=4%

    <=-4%

    Q3 2019

    8.62%

    22.85%

    Q2 2019

    7.98%

    24.15%

    Q1 2019

    8.03%

    24.90%

    Q4 2018

    8.45%

    18.71%

    Q3 2018

    6.43%

    17.67%

    Q2 2018

    6.20%

    15.60%

    Q1 2018

    7.01%

    13.63%

    Q4 2017

    6.83%

    15.06%

    Q3 2017

    8.62%

    14.23%

    Q2 2017

    10.00%

    14.00%

    Q1 2017

    12.00%

    14.80%

    Q4 2016

    10.48%

    19.35%

    Q3 2016

    9.94%

    23.73%

     

     

     

    ABOUT S&P DOW JONES INDICES

    S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has been innovating and developing indices across the spectrum of asset classes helping to define the way investors measure and trade the markets.

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    SOURCE S&P Dow Jones Indices

    PR Newswire
    December 17, 2019 – 9:04 AM PST
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