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S&P 500 Q2 Buybacks Decline 27% From Q1 2014
PR Newswire
NEW YORK

NEW YORK, Sept. 23, 2014 /PRNewswire/ -- S&P Dow Jones Indices announced today that preliminary results show that S&P 500® stock buybacks, or share repurchases, decreased 1.6% to $116.2 billion during the second quarter of 2014, down from the $118.1 billion spent on share repurchases during the second quarter of 2013. The $116.2 billion also represents a 27.1% decline over the $159.3 billion spent on stock buybacks during Q1 2014, which was the second largest on record.

According to S&P Dow Jones Indices, for the 12 months ending June 2014, S&P 500 issues increased their buyback expenditures by 26.6% to $533.0 billion from the $420.9 billion posted during the corresponding twelve month period in 2013. The twelve-month high mark was reached in fiscal year 2007, when companies spent $589.1 billion. The twelve-month recession low point was $137.6 billion, recorded in fiscal year 2009. 

Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, notes that buybacks are half of the stock supply story, with company stock issuance (for employee options, M&A or financing) being the other half.  For the second quarter of 2014, companies reduced their overall spending on buybacks, even as the average daily stock price rose 3.6%, resulting in fewer shares being purchased.  However, companies on aggregate also issued fewer shares, with the net change resulting in a lower share count and higher earnings-per-share (EPS).

"By reducing their share count, more companies are adding tailwinds to their EPS," says Silverblatt. "During the second quarter, 23% of S&P 500 issues reduced their year-over-year share count enough to push up their earnings per share significantly versus just shy of 20% during Q1 and 12% during the second quarter of 2013."

S&P Dow Jones Indices' data show that more companies continued to reduce their share count, with 295 doing so in Q2, up from 290 in Q1 2014 and 223 in Q2 2013. Significant changes (generally considered 1% or greater for the quarter) continued to strongly favor reductions, as 126 issues reduced their share count by at least 1%, up from last quarter's 123 issues and 90 issues for Q2 2013. Share reduction change impacts of at least 4% (Q2 2014 over Q2 2013), which can be seen in EPS comparisons, were 116 in Q2 2014, up from the prior quarter's 99, and Q2 2013's 62.

Silverblatt also comments that companies continue to increase their total shareholders' returns through regular cash dividends, as well as buybacks, even as the second quarter total expenditure declined from the first quarter. Over the year ended June 2014, buyback and dividend expenditures combined reached a new record high of $865.9 billion, with buybacks representing 61.6% of the total.

"If companies wish to continue the trend of decreasing share count (and therefore increasing EPS), they may need to spend more on buybacks," says Silverblatt. "Third quarter prices are averaging +3.9% and the continuing bull market conditions are putting more options in the money. While share count reduction is a management tool for EPS growth, most companies have shown a tendency to protect their EPS from dilution by at least covering their employee issuance."

On a sector basis, Information Technology continued to dominate the group, even as its buybacks decreased to represent 26.3% (down from last quarter's 30.9%) of all S&P 500 buybacks. Apple led the Index with its $5 billion stock repurchase program, down from its record $18 billion expenditure last quarter.

All data in this press release should be sourced to: S&P Dow Jones Indices. Historical S&P 500 buyback data can be found at: www.spindices.com/indices/equity/sp-500.

 

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S&P Dow Jones Indices

              

S&P 500, $ U.S. BILLIONS, preliminary values in bold italics

        
 

MARKET

OPERATING

AS REPORTED

        

DIVIDEND &

DIVIDENDS
 

VALUE

EARNINGS

EARNINGS

DIVIDENDS

BUYBACKS

DIVIDEND

BUYBACK

BUYBACK

& BUYBACKS

PERIOD

$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

YIELD

YIELD

YIELD

$ BILLION

6/30/2014 Prelim.

$17,404

$261.47

$241.76

$86.65

$116.17

1.91%

3.06%

4.98%

$202.82

3/31/2014

$16,700

$243.67

$221.82

$81.96

$159.28

1.93%

3.20%

5.14%

$241.24

12/31/2013

$16,495

$252.10

$236.31

$84.98

$129.41

1.89%

2.88%

4.77%

$214.40

9/30/2013

$14,960

$239.50

$219.13

$79.26

$128.16

2.05%

2.98%

5.03%

$207.42

6/30/2013

$14,310

$234.84

$221.56

$76.67

$118.05

2.07%

2.94%

5.02%

$194.72

3/31/2013

$13,979

$229.57

$215.76

$70.86

$99.97

2.06%

2.97%

5.02%

$170.82

12/31/2012

$12,742

$206.84

$184.50

$79.83

$99.15

2.20%

3.13%

5.33%

$178.98

9/30/2012

$12,881

$214.58

$189.64

$69.48

$103.72

2.07%

3.01%

5.08%

$173.20

6/30/2012

$12,303

$229.69

$195.27

$67.31

$111.75

2.08%

3.27%

5.35%

$179.05

3/31/2012

$12,730

$219.09

$208.15

$64.07

$84.29

1.95%

3.14%

5.09%

$148.37

12/31/2011

$11,385

$214.83

$186.85

$65.89

$87.59

2.11%

3.56%

5.67%

$153.47

09/30/2011

$10,303

$230.30

$206.08

$59.20

$118.41

2.22%

3.92%

6.14%

$177.61

6/30/2011

$12,021

$226.29

$202.44

$59.03

$109.24

1.84%

3.04%

4.88%

$168.27

3/31/2011

$12,068

$205.34

$195.15

$56.08

$89.84

1.76%

2.76%

4.52%

$145.91

12/31/2010

$11,430

$199.40

$187.67

$54.85

$86.36

1.80%

2.61%

4.42%

$141.21

09/30/2010

$10,336

$195.28

$176.80

$51.26

$79.56

1.94%

2.52%

4.45%

$130.81

06/30/2010 

$9,323

$189.04

$178.00

$50.44

$77.64

2.10%

2.31%

4.41%

$128.08

03/31/2010

$10,560

$175.00

$157.85

$49.28

$55.26

1.83%

1.54%

3.36%

$104.54

12/31/2009

$9,928

$152.77

$135.14

$49.04

$47.82

1.97%

1.39%

3.36%

$96.86

09/30/2009

$9,337

$139.37

$130.37

$47.21

$34.85

2.24%

1.48%

3.71%

$82.06

06/30/2009

$8,045

$120.85

$118.22

$47.63

$24.20

2.77%

2.40%

5.17%

$71.83

03/31/2009 

$6,928

$87.78

$65.29

$51.73

$30.78

3.43%

3.70%

7.13%

$82.51

12/31/2008

$7,852

-$0.78

-$202.11

$62.19

$48.12

3.15%

4.33%

7.48%

$110.31

09/30/2008

$10,181

$142.90

$86.16

$61.44

$89.71

2.48%

4.26%

6.73%

$151.15

06/30/2008

$11,163

$148.43

$112.15

$61.94

$87.91

2.26%

4.62%

6.88%

$149.86

 

 

 

S&P Dow Jones Indices

            

S&P 500 20 LARGEST Q2 2014 BUYBACKS, $ MILLIONS 

      
     

Q2,'14

12 Mo Jun,'14

Indicated

SCR

SCR
     

Buybacks

Buybacks

Dividend

Q2,'14/

Q2,'14/

Company  

Ticker

Sector

$ Mil

$ Mil

$ Mil

Q1,'14

Q2,'13

International Business Machines 

IBM

Information Technology

$3,662

$19,542

$4,454

-3.52%

-9.40%

Exxon Mobil

XOM

Energy

$3,003

$13,209

$11,852

-0.84%

-3.07%

Wells Fargo 

WFC

Financials

$2,954

$7,497

$7,374

-0.05%

-0.63%

Intel

INTC

Information Technology

$2,352

$4,009

$4,480

0.12%

0.33%

Home Depot

HD

Consumer Discretionary

$2,250

$7,700

$2,572

-1.67%

-6.24%

Merck 

MRK

Healthcare

$2,246

$3,824

$5,143

-0.74%

-2.03%

Express Scripts Holding 

ESRX

Healthcare

$2,042

$5,914

$0

-2.53%

-7.47%

Oracle 

ORCL

Information Technology

$1,972

$9,813

$2,140

-0.13%

-3.93%

Walt Disney 

DIS

Consumer Discretionary

$1,833

$6,480

$1,489

-1.24%

-4.01%

eBay 

EBAY

Information Technology

$1,657

$3,869

$0

-0.71%

-3.50%

Cisco Systems

CSCO

Information Technology

$1,533

$9,843

$3,893

-0.15%

-4.87%

Citrix Systems

CTXS

Information Technology

$1,501

$1,806

$0

-7.97%

-9.34%

Boeing 

BA

Industrials

$1,498

$5,799

$2,129

-1.94%

-4.04%

3M 

MMM

Industrials

$1,426

$6,351

$2,238

-1.47%

-4.93%

JPMorgan Chase 

JPM

Financials

$1,375

$2,800

$6,056

-0.29%

-0.05%

QUALCOMM 

QCOM

Information Technology

$1,350

$6,675

$2,836

-0.29%

-2.89%

General Dynamic

GD

Industrials

$1,261

$2,946

$850

-1.47%

-2.86%

The Goldman Sachs Group

GS

Financials

$1,250

$6,019

$984

-1.80%

-5.48%

Gilead Sciences

GILD

Healthcare

$1,200

$2,150

$0

-0.92%

-1.78%

Top 20   

    

$41,365

$159,157

$69,826

    

S&P 500

    

$116,171

$533,017

$356,525

    

Top 20 % of S&P 500

    

35.61%

29.86%

19.59%

    

   SCR - Share Count Reduction in average weighted diluted share count used for EPS

 

 

 

S&P Dow Jones Indices

            

S&P 500 SECTOR BUYBACKS

            
             

SECTOR $ MILLIONS

 Q2,'14

 Q1,'14

 Q2,'13

12MO JUN,'14   

12 MO JUN,'13   

5-YEARS

Consumer Discretionary

$18,969

$18,610

$13,856

$78,621

$59,618

$299,343

Consumer Staples

$8,529

$12,031

$10,095

$42,903

$45,991

$228,684

Energy

$8,716

$13,091

$8,400

$46,024

$31,668

$171,830

Financials

$17,330

$18,262

$13,697

$67,417

$54,024

$220,068

Healthcare

$15,221

$15,814

$14,878

$61,349

$65,041

$278,118

Industrials

$12,662

$22,024

$14,354

$65,088

$42,959

$187,455

Information Technology

$30,569

$49,182

$37,221

$146,394

$95,583

$469,028

Materials

$3,772

$8,534

$1,578

$18,114

$6,116

$41,035

Telecommunication Services

$324

$1,565

$3,851

$6,419

$18,484

$30,869

Utilities

$79

$164

$122

$689

$1,403

$10,079

TOTAL

$116,171

$159,277

$118,051

$533,017

$420,887

$1,936,508
             

SECTOR BUYBACK MAKEUP %

Q2,'14

Q1,'14

Q2,'13

12MO JUN,'14

12 MO JUN,'13

5-YEARS

Consumer Discretionary

16.33%

11.68%

11.74%

14.75%

14.16%

15.46%

Consumer Staples

7.34%

7.55%

8.55%

8.05%

10.93%

11.81%

Energy

7.50%

8.22%

7.12%

8.63%

7.52%

8.87%

Financials

14.92%

11.47%

11.60%

12.65%

12.84%

11.36%

Healthcare

13.10%

9.93%

12.60%

11.51%

15.45%

14.36%

Industrials

10.90%

13.83%

12.16%

12.21%

10.21%

9.68%

Information Technology

26.31%

30.88%

31.53%

27.47%

22.71%

24.22%

Materials

3.25%

5.36%

1.34%

3.40%

1.45%

2.12%

Telecommunication Services

0.28%

0.98%

3.26%

1.20%

4.39%

1.59%

Utilities

0.07%

0.10%

0.10%

0.13%

0.33%

0.52%

TOTAL

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

 

 

 

S&P Dow Jones Indices

              

S&P 500 INDUSTRIAL (OLD) CASH AND EQUIVALENT LEVELS 

      
               
 

CASH & 

% HELD

% SHORT-TERM

CASH %

LTD % OF

CASH % OF

  
 

EQUIVALENT

AS CASH

SECURITIES

OF LTD

MARKET

MARKET

  

DATE

$ MILLIONS

      

VALUE

VALUE

Cash and equivalents (cash) are
classified under current assets on
the balance sheet, and represent the
readily available discretionary liquid
assets of a company. Cash is
measured for the S&P Industrials
(Old), which consist of the S&P 500
minus Financials, Utilities and
Transportation issues since these
issues maintain high cash reserves
as part of their normal operating
process [Note: The S&P Industrials
(Old) date back for decades. When
the GICS classifications were
developed, one of the new sectors
was the Industrials, so the former
group is referred to as the S&P
Industrials (Old)].

6/30/2014 Prelim.

$1,249,892

54.06%

45.94%

49.60%

17.22%

8.54%

3/31/2014

$1,233,070

58.63%

41.37%

49.49%

17.86%

8.84%

12/31/2013

$1,304,447

61.84%

38.16%

53.21%

17.68%

9.41%

9/30/2013

$1,245,790

60.36%

39.64%

55.46%

19.09%

10.59%

6/30/2013

$1,143,837

58.30%

41.70%

59.95%

16.02%

9.60%

3/31/2013

$1,093,516

60.14%

39.86%

58.76%

15.91%

9.35%

12/31/2012

$1,091,310

63.39%

36.61%

53.21%

18.94%

10.08%

9/30/2012

$1,030,442

64.20%

35.80%

58.93%

15.93%

9.39%

6/30/2012

$985,375

63.89%

36.11%

55.00%

17.26%

9.49%

3/31/2012

$1,013,187

65.98%

34.02%

50.96%

18.36%

9.36%

12/31/2011

$1,027,296

68.14%

31.86%

52.40%

20.39%

10.69%

9/30/2011

$998,581

64.66%

35.34%

52.56%

21.85%

11.48%

6/30/2011

$976,061

65.01%

34.99%

59.05%

17.32%

10.23%

3/31/2011

$963,314

67.28%

32.72%

52.62%

18.39%

9.68%

12/31/2010

$940,149

65.48%

34.52%

51.68%

20.24%

10.46%

09/30/2010

$902,389

65.51%

33.55%

48.79%

20.19%

9.85%

06/30/2010

$842,494

65.74%

34.26%

46.87%

24.73%

11.59%

 

 

About S&P Dow Jones Indices
S&P Dow Jones Indices LLC, a part of McGraw Hill Financial, is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average™, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of investors. More assets are invested in products based upon our indices than any other provider in the world. With over 1,000,000 indices covering a wide range of asset classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com.  

S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("S&P"), a part of McGraw Hill Financial. Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones").  These trademarks have been licensed to S&P Dow Jones Indices LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

 

 

SOURCE S&P Dow Jones Indices