S&P 500 Buybacks Total $135.3 Billion for Q4 2016, Decline for Full-Year 2016
- Q4 2016 repurchases 20.6% higher than Q3 2016, but 7.3% lower than Q4 2015
- Full-year 2016 expenditures down 6.3% from 2015
- Cash reserves tick down from record set in Q3 2016

NEW YORK, March 22, 2017 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI") today announced preliminary results indicating that S&P 500® stock buybacks, or share repurchases, totaled $135.3 billion for Q4 2016. This is a 20.6% increase from the $112.2 billion reported for Q3 2016, but a 7.3% decrease from the $145.9 billion reported for Q4 2015. The all-time high is $172.0 billion from Q3 2007.

For full-year 2016, S&P 500 issues spent $536.4 billion on buybacks, down 6.3% from $572.2 billion for 2015 and down 3.1% from $553.3 billion for 2014; the 12-month high is $589.4 billion, which was set during Q1 2016.

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

Key Takeaways:

  • The last time S&P 500 issues reduced buybacks payments in consecutive years was in 2008 and 2009.
  • Issues reducing their year-over-year share count, which is used to define earnings per share (EPS), declined to 19%, after 11 consecutive quarters over 20%.
  • S&P 500 buybacks are down 3.1% from 2014, but ex-Energy they are up 3.6%.
  • Total shareholder return increased to $239.1 billion (up 13.5%) for Q4 2016, from $210.6 billion for Q3 2016, as dividends set a quarterly record ($103.8 billion); for full-year 2016, the return was $933.6 billion, down 2.2% from 2015's $954.5 billion.
  • 281 S&P 500 issues reduced their share counts for Q4 2016, up from 257 for Q3 2016 but down from 318 for Q4 2015.
  • Year-over-year share count reductions of at least 4%, which are seen as impacting EPS, declined to 93 for Q4 2016, compared to 117 for Q3 2016 and 120 for Q4 2015.

"Share buybacks picked up for Q4 2016, but not enough to make up for the year's earlier declines, as 2016 marked consecutive years of reduced expenditures," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.

Buybacks remained concentrated, as the top 20 issues accounted for 46.7% of the total Q4 2016 expenditures.

"The ability of companies to increase buybacks remains high, as cash declined a tick from last quarter's record level, with money remaining relatively cheap and easily accessible," said Silverblatt.

"However, the slowdown since Q1 2016 may indicate that companies do not currently want to increase planned buybacks. Q1 2017 prices are averaging higher, up 6% from Q4 2016 and up 19% from Q1 2016, meaning increased expenditures may be needed to cover the higher share prices to avoid EPS dilution." 

Sector Analysis:

Health Care jumped to 21.4% ($28.9 billion) of all buybacks, from 11.7% ($13.1 billion) for Q3 2016, led by Allergan's (AGN) $12.3 billion accelerated buyback program.

Information Technology continued strong, even as its overall percentage of S&P 500 buybacks decreased to 21.2% ($28.7 billion) for Q4 2016, from 23.2% ($26.0 billion) for Q3 2016.

Energy saw its contribution decrease to 0.7% ($0.98 billion) of all buybacks for Q4 2016, compared to 1.2% ($1.34 billion) for Q3 2016 and 7.8% ($10.3 billion) for Q4 2014.

Financials increased its buybacks by 6.2% to $26.8 billion for Q3 2016.  

Issues:

Allergan spent the most on buybacks for Q4 2016, at $12.3 billion, which was the seventh-largest quarterly purchase by an S&P 500 issue in history. The company spent $2.7 billion for Q3 2016, $15.1 billion for full-year 2016 and $118 million for full-year 2015.

Apple (AAPL) spent $10.9 billion, the index's ninth-largest quarterly expenditure ever, up from $6.0 billion for Q3 2016. Apple for 2016 spent $33.7 billion, down from $37.1 billion for 2015.

Citigroup (C) was third, with $4.1 billion, up from $2.5 billion for Q3 2016.

Microsoft (MSFT) came in fourth, with $3.6 billion, down from $4.4 billion for Q3 2016.

General Electric (GE) rounded out the top 5, at $3.5 billion, down from $3.7 billion for Q3 2016.

Exxon Mobil (XOM) ranked 111, up from 291 last quarter, as it increased its expenditures to $250 million, from $1 million for both Q3 2016 and Q2 2016. Exxon Mobil spent $3.3 billion for Q4 2015.  

Total Shareholder Returns:

Silverblatt determined that total shareholder return through regular cash dividends and buybacks increased 13.5% to $239.1 billion for Q4 2016, up from $210.6 billion for Q3 2016. Full-year 2016 shareholder return totaled $934.6 billion, down 2.2% from $954.5 billion for 2015.

Dividends posted a 5.5% payment gain for Q4 2016, to $103.8 billionthe first $100 billion quarter in S&P 500 history – as 2016's $397.2 billion payment was 3.9% ahead of the $382.3 billion paid for 2015.

According to Silverblatt, preliminary cash reserves ticked down from their Q3 2016 record, as S&P 500 Industrial (Old), which consists of the S&P 500 less Financials, Transportations and Utilities, available cash and equivalent now stands at $1.48 trillion. This is 0.6% lower than the record of $1.49 trillion, which was set last quarter. The current cash level is 1.7 times greater than expected 2017 operating income, giving corporations fiscal freedom.  

"While buyback activity has slowed since Q1 2016, the steady growth of dividends indicates a positive development for shareholders," said Silverblatt. 

"Cash remains a tick off the record level posted in the third quarter, as low-cost financing, both domestically and internationally, remains plentiful. The rate of dividend increases continues to slow across sector lines into 2017, but Energy decreases have stabilized.

"Base buyback expenditures, used to negate stock options, may need to increase to compensate for higher share prices, as markets have posted all-time highs. Discretionary buybacks, used to reduce share count and increase EPS, have declined but remain popular.

"Looking ahead, repatriation legislation, either separate or as part of income taxes, could boost shareholder return, with buybacks being more popular than dividends."

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 in bold)







PERIOD

MARKET

OPERATING

AS REPORTED





DIVIDEND &

DIVIDENDS


VALUE

EARNINGS

EARNINGS

DIVIDENDS

BUYBACKS

DIVIDEND

BUYBACK

BUYBACK

& BUYBACKS


$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

YIELD

YIELD

YIELD

$ BILLION

2016 Prelim.

$18,412.04

$919.77

$818.46

$397.21

$536.38

2.16%

2.91%

5.07%

$933.60

2015

$17,916.79

$885.38

$762.74

$382.32

$572.16

2.13%

3.19%

5.33%

$954.47

2014

$17,272.45

$1,004.22

$909.09

$350.43

$553.28

2.03%

3.20%

5.23%

$903.71

2013

$14,936.01

$956.01

$892.76

$311.77

$475.59

2.09%

3.18%

5.27%

$787.36

2012

$12,408.36

$870.19

$777.56

$280.69

$398.91

2.26%

3.21%

5.48%

$679.60

5 YR TOTAL

$16,054.89

$4,635.57

$4,160.62

$1,722.42

$2,536.31

10.73%

15.80%

26.53%

$4,258.74

10 YR TOTAL

$13,494.12

$7,938.38

$6,819.15

$2,857.93

$4,306.61

21.18%

31.91%

53.09%

$7,164.54

   (mkt val avg 5 qtrs)



















12/31/2016 Prelim.

$19,268

$240.03

$207.84

$103.82

$135.29

2.06%

2.78%

4.85%

$239.11

9/30/2016

$18,742

$247.98

$219.46

$98.43

$112.20

2.10%

2.92%

5.01%

$210.63

6/30/2016

$18,193

$222.77

$201.79

$98.30

$127.50

2.14%

3.22%

5.36%

$225.81

3/31/2016

$17,958

$208.99

$189.37

$96.67

$161.39

2.15%

3.28%

5.43%

$258.05

12/31/2015

$17,900

$201.95

$163.76

$99.39

$145.88

2.14%

3.20%

5.33%

$245.27

9/30/2015

$16,917

$224.14

$204.58

$95.07

$150.58

2.22%

3.30%

5.52%

$245.66

6/30/2015

$18,219

$230.84

$201.35

$94.45

$131.56

2.03%

3.04%

5.07%

$226.01

3/31/2015

$18,303

$228.45

$193.05

$93.41

$144.13

1.98%

2.94%

4.92%

$237.54

12/30/2014

$18,245

$237.14

$202.31

$92.80

$132.63

1.92%

3.03%

4.95%

$225.43

9/30/2014

$17,519

$262.92

$244.00

$89.02

$145.19

1.96%

3.14%

5.10%

$234.22

6/30/2014

$17,404

$260.50

$240.96

$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

 

 

S&P Dow Jones Indices








S&P 500 SECTOR BUYBACKS








SECTOR $ MILLIONS

Q4,'16

Q3,'16

Q4,'15

2016

2015

2014

5-YEARS









Consumer Discretionary

$20,604

$21,970

$22,949

$89,528

$92,039

$81,747

$398,616

Consumer Staples

$11,615

$8,397

$16,394

$43,440

$44,890

$42,347

$221,366

Energy

$979

$1,344

$2,587

$5,762

$15,250

$40,928

$138,612

Financials

$26,772

$25,213

$25,018

$104,357

$94,557

$75,404

$385,197

Healthcare

$28,898

$13,089

$16,457

$87,588

$70,320

$60,069

$349,517

Industrials

$14,773

$13,267

$19,827

$76,166

$80,113

$66,718

$308,989

Information Technology

$28,731

$25,978

$35,516

$119,457

$150,327

$154,703

$622,619

Materials

$2,497

$2,228

$6,332

$8,397

$15,521

$28,179

$66,830

Real Estate

$303

$456


$759

$0

$0

$759

Telecommunication Services

$69

$247

$547

$529

$6,222

$2,267

$36,714

Utilities

$51

$15

$253

$399

$2,920

$913

$7,095

TOTAL

$135,292

$112,203

$145,881

$536,382

$572,159

$553,275

$2,536,312

 

 

S&P Dow Jones Indices









S&P 500 20 LARGEST Q4 2016 BUYBACKS, $ MILLIONS 







Company  

Ticker

Sector

Q4,'16

2016

2015

5-Year

10-year

Indicated




Buybacks

Buybacks

Buybacks

Buybacks

Buybacks

Dividend




$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

Allergan plc

AGN

Healthcare

$12,318

$15,076

$118

$15,457

$15,495

$0

Apple 

AAPL

Information Technology

$10,851

$33,710

$37,086

$143,686

$143,686

$12,158

Citigroup

C

Financials

$4,126

$9,606

$5,880

$18,523

$20,940

$1,824

Microsoft 

MSFT

Information Technology

$3,599

$15,495

$17,845

$52,079

$114,883

$12,130

General Electric

GE

Industrials

$3,460

$21,429

$1,734

$39,064

$61,752

$8,493

Amer International Gr

AIG

Financials

$2,954

$11,460

$10,691

$37,650

$47,736

$1,315

Home Depot

HD

Consumer Discretionary

$2,345

$6,880

$7,000

$32,279

$50,471

$4,337

JPMorgan 

JPM

Financials

$2,251

$9,082

$5,616

$25,684

$45,996

$6,870

Wal-Mart Stores

WMT

Consumer Staples

$2,044

$8,298

$4,112

$23,051

$58,857

$6,269

Wells Fargo 

WFC

Financials

$2,034

$8,116

$8,697

$35,437

$47,269

$7,634

Johnson & Johnson

JNJ

Healthcare

$2,025

$8,986

$5,368

$37,868

$55,402

$8,706

McKesson 

MCK

Healthcare

$2,002

$2,712

$960

$5,120

$10,511

$237

Visa 

V

Information Technology

$1,953

$7,106

$4,211

$22,488

$41,679

$1,233

AbbVie

ABBV

Healthcare

$1,824

$6,036

$7,586

$14,597

$14,597

$4,160

Yum! Brands

YUM

Consumer Discretionary

$1,750

$5,404

$381

$8,262

$12,501

$440

United Technologies 

UTX

Industrials

$1,726

$2,254

$10,000

$14,194

$24,830

$2,174

McDonald's 

MCD

Consumer Discretionary

$1,509

$11,171

$6,099

$24,049

$41,583

$3,122

Goldman Sachs Group

GS

Financials

$1,488

$6,078

$4,135

$26,132

$47,720

$1,034

Walt Disney

DIS

Consumer Discretionary

$1,465

$6,612

$7,144

$27,019

$46,907

$2,483

CBS

CBS

Consumer Discretionary

$1,463

$2,497

$1,562

$10,716

$13,529

$268

Top 20   



$63,187

$198,008

$146,225

$613,355

$916,344

$84,886

S&P 500



$135,292

$535,976

$572,159

$2,536,313

$4,306,615

$425,798

Top 20 % of S&P 500



46.70%

36.94%

25.56%

24.18%

21.28%

19.94%

   Gross values are not adjusted for float







 

 

S&P Dow Jones Indices



S&P 500 20 Largest Quarterly Buybacks, $ Millions, as of Q4 2016, 2 issues added for Q4,'16

$ MILLIONS

QUARTER

COMPANY

SECTOR

$17,971

Q1 2014

Apple

Information Technology

$17,000

Q3 2014

Apple

Information Technology

$16,000

Q2 2013

Apple

Information Technology

$15,707

Q2 2007

International Business Machines 

Information Technology

$13,253

Q3 2015

Apple

Information Technology

$12,852

Q2 2012

Johnson & Johnson 

Healthcare

$12,318

Q4 2016

Allergan plc (AGN)

Healthcare

$12,183

Q3 2012

Johnson & Johnson 

Healthcare

$10,851

Q4 2016

Apple

Information Technology

$10,723

Q3 2007

Home Depot

Consumer Discretionary

$10,166

Q2 2016

Apple

Information Technology

$10,000

Q2 2015

Apple

Information Technology

$9,859

Q4 2007

Transocean

Energy

$9,179

Q4 2006

Exxon Mobil 

Energy

$9,465

Q1 2008

Exxon Mobil 

Energy

$8,845

Q4 2008

Exxon Mobil 

Energy

$8,761

Q2 2008

Exxon Mobil 

Energy

$8,663

Q3 2008

Exxon Mobil 

Energy

$8,463

Q3 2007

Exxon Mobil 

Energy

$8,166

Q1 2014

International Business Machines 

Information Technology

$230,425


TOP 20


 

S&P Dow Jones Indices




S&P 500 Q4 2016 Buyback Report







SECTOR

DIVIDEND

BUYBACK 

COMBINED


YIELD

YIELD

YIELD

Consumer Discretionary

1.57%

3.59%

5.16%

Consumer Staples

3.06%

2.31%

5.37%

Energy

2.75%

0.44%

3.19%

Financials

1.73%

3.38%

5.11%

HealthCare

1.73%

3.07%

4.80%

Industrials

2.22%

3.69%

5.91%

Information Technology

1.55%

2.84%

4.38%

Materials

2.17%

1.43%

3.59%

Real Estate

3.63%

0.59%

4.23%

Telecommunication Services

4.56%

0.11%

4.66%

Utilities

3.54%

0.06%

3.60%

S&P 500

2.11%

2.66%

4.77%

   Uses full values (unadjusted for float)



   Dividends based on indicated; buybacks based on the last 12-months ending Q4,'16

 

ABOUT S&P DOW JONES INDICES
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SOURCE S&P Dow Jones Indices

For further information: S&P DJI MEDIA CONTACTS: Soogyung Cho Jordan, Head of Communications, (+1) 212 438 2297, [email protected]; Luke Shane, US Communications, (+1) 212 438 8184, [email protected]; INDEX INVESTMENT STRATEGY: Howard Silverblatt, Senior Index Analyst, (+1) 212 438 3916, [email protected]