Q2 2017 S&P 500 Buybacks Fall 9.8% from Q1, to $120.1 Billion
- Buybacks fall 14.5% for the 12-month year-over-year period
- EPS support via discretionary share count reductions again declines
- Cash reserves set another record

NEW YORK, Sept. 18, 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 $120.1 billion for Q2 2017. This is a 9.8% decrease from the $133.1 billion reported for Q1 2017, a 5.8% decrease from the $127.5 billion reported for Q2 2016 and a 25.6% decrease from the $161.4 billion for Q1 2016, when companies were supporting share prices in a declining market.

For the 12-month period ending June 2017, S&P 500 issues spent $500.8 billion on buybacks, down 14.5% from the $585.4 billion set during the 12-month period ending June 2016.

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

Key Takeaways:

  • The number of S&P 500 issues substantially reducing their year-over-year share count, which is used to calculate EPS, declined to 13.8% for Q2 2017, compared to 14.8% for Q1 2017 and 26.6% for Q2 2016.
  • Total shareholder return totaled $224.1 billion, down 4.2% from $234.0 billion for Q1 2017.
  • S&P 500 dividends set a new record payment, at $104.0 billion, up from $100.9 billion for Q1 2017; for the 12-month period ending June 2017, the total shareholder return was $907.9 billion, down 6.9% from $974.8 billion for the 12-month period ending June 2016.
  • 268 S&P 500 issues reduced their share count for Q2 2017, compared to 255 for Q1 2017 and 275 for Q2 2016.
  • Year-over-year share count reductions of at least 4%, which are seen as affecting EPS, declined to 66 issues for Q2 2017, compared to 71 for Q1 2017 and 134 for Q2 2016.

"Share buyback expenditures for Q2 2017 declined, as share prices increased, resulting in fewer share repurchases and a weaker tailwind for EPS," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.

"The going rate for the last two years was that more than 20% of S&P 500 issues provided at least a 4% tailwind to EPS via reduced share counts. For 2017, that rate has dropped significantly. The Street is interpreting the decline in discretionary buybacks, which reduce share counts and increase EPS, as a positive sign; while there is less support for EPS growth, companies are showing an ability to meet their EPS targets without the buyback tailwind, as their Q2 2017 record earnings show."

Buyback concentration declined for the quarter, as the top 20 issues accounted for 38.6% of all share repurchases, down from 42.1% for Q1 2017; it is the lowest recording for the top 20 since 37.6% for Q4 2015.

"The ability of companies to increase buybacks remains strong, as available cash set a new record, surpassing $1.5 trillion for the first time," said Silverblatt. "Net income improved, with Q2 2017 setting a record, and current Q3 2017 estimates projecting additional gains."

GICS® Sector Analysis:

Energy buybacks increased the most, up 47.5% to $3.1 billion, up from $2.1 billion for Q1 2017; expenditures still significantly trailed the pre-June 2014 oil price fall, when the sector spent $13.1 billion for Q1 2014.

Financials, which exhibited strength during Q1 2017 with a 10.2% increase, posted a 9.1% decrease for Q2 2017 with $26.8 billion, compared to $29.5 billion for Q1 2017, accounting for 22.3% of all buybacks. Of note, in June 2017 major banks received approval to increase their shareholder returns, leading to potentially higher buybacks and dividend expenditures.

Information Technology was steady, as expenditures rose 0.5% to $27.6 billion from the prior period's $27.5 billion. The sector represents 23.0% of all buybacks but has 46% of the index's cash reserves.

Issues:

Apple (AAPL) spent $7.1 billion for Q2 2017, down from $7.2 billion for Q1 2017 and down from $10.2 billion for Q2 2016.

Charter Communications (CHTR) was second, with $3.3 billion, up from $0.9 billion for Q1 2017 and $0.08 billion for Q2 2016.

J. P. Morgan (JPM) was third, with $3.0 billion, up from $2.8 billion for both Q1 2017 and Q2 2016.

Home Depot (HD) came in fourth, with $2.6 billion, up from $1.3 billion for Q1 2017.

Boeing (BA) rounded out the top five, at $2.5 billion, flat from Q1 2017.

Total Shareholder Return:

Silverblatt determined that total shareholder return, through regular cash dividends and buybacks, decreased 4.2% to $224.1 billion for Q2 2017, down from $234.0 billion for Q1 2017. For the 12-month period ending June 2017, shareholder return totaled $907.8 billion, down 6.9% from the record $974.8 billion set during the 12-month period ending June 2016.

Dividends posted a 3.1% increase for Q2 2017, to a record $104.0 billion, up from $100.9 billion for Q1 2017. Payments totaled $407.1 billion for the 12-month period ending June 2017, up 4.5% from $389.3 billion for the 12-month period ending June 2016. With Q3 2017 nearing its end, the quarter is expected to post another record for cash dividend payments.

According to Silverblatt, preliminary cash reserves increased from Q1 2017. S&P 500 Industrial (Old), which consists of the S&P 500 less Financials, Transportations and Utilities, available cash and equivalent surpassed $1.5 trillion for the first time, standing at $1.534 trillion. Available cash stood at $1.496 trillion for Q1 2017. The current cash level is 1.6 times greater than expected 2018 operating income.  

"The key question remaining is whether companies will aid EPS through discretionary buybacks or through old-fashioned earnings growth," said Silverblatt.

"Income tax reform and potential cash repatriation are other key factors to watch, as new legislation could lead to a potential increase of shareholder returns."

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

12 Months Jun 2017

$20,762

$996.81

$894.36

$407.11

$500.75

1.96%

2.41%

4.37%

$907.87

12 Months Jun 2016

$18,193

$857.84

$759.50

$389.43

$585.35

2.14%

3.22%

5.36%

$974.78

2016

$19,268

$919.85

$818.55

$397.21

$536.38

2.06%

2.78%

4.85%

$933.60

2015

$17,900

$885.38

$762.74

$382.32

$572.16

2.14%

3.20%

5.33%

$954.47

2014

$18,245

$1,004.22

$909.09

$350.43

$553.28

1.92%

3.03%

4.95%

$903.71











6/30/2017 Preliminary

$20,762

$261.39

$231.32

$104.01

$120.11

1.96%

2.41%

4.37%

$224.12

3/31/2017

$20,276

$247.32

$235.65

$100.86

$133.15

1.98%

2.51%

4.49%

$234.01

12/31/2016

$19,268

$240.11

$207.93

$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

 

S&P Dow Jones Indices







S&P 500 SECTOR BUYBACKS







SECTOR $ MILLIONS

Q2,'17

Q1,'17

Q2,'16

12MO JUN','17

12MO JUN,'16

5-YEARS








Consumer Discretionary

$22,357

$16,196

$20,283

$81,126

$97,195

$402,527

Consumer Staples

$10,296

$14,469

$11,720

$44,776

$49,706

$223,775

Energy

$3,107

$2,107

$1,386

$7,538

$9,604

$123,038

Financials

$26,815

$29,497

$25,666

$108,297

$103,127

$416,479

Healthcare

$12,636

$27,010

$14,974

$81,633

$76,892

$352,978

Industrials

$14,799

$14,113

$21,897

$56,952

$90,943

$325,270

Information Technology

$27,628

$27,477

$30,066

$109,815

$143,425

$641,819

Materials

$1,020

$1,359

$1,269

$7,104

$12,400

$66,398

Real Estate

$1,150

$574


$2,483

$0

$2,483

Telecommunication Services

$282

$191

$201

$789

$1,084

$32,505

Utilities

$20

$158

$38

$243

$974

$6,258

TOTAL

$120,109

$133,150

$127,501

$500,754

$585,350

$2,593,531

 

S&P Dow Jones Indices

S&P 500 20 LARGEST Q2 2017 BUYBACKS, $ MILLIONS 

Company  

Ticker

Sector

Q2,'17

12MO Jun,'17

12MO Jun.'16

5-Year

10-year

Indicated




Buybacks

Buybacks

Buybacks

Buybacks

Buybacks

Dividend




$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

Apple 

AAPL

Information Technology

$7,093

$31,131

$36,949

$157,940

$90,992

$13,139

Charter Communications

CHTR

Consumer Discretionary

$3,328

$5,686

$114

$5,864

-$15,573

$0

JPMorgan 

JPM

Financials

$3,007

$10,385

$7,003

$30,086

$58,379

$7,958

Home Depot

HD

Consumer Discretionary

$2,632

$8,360

$6,356

$34,701

$50,303

$4,256

Boeing 

BA

Industrials

$2,500

$6,500

$7,751

$26,554

$17,546

$3,428

Walt Disney 

DIS

Consumer Discretionary

$2,444

$7,535

$9,180

$31,125

$27,548

$2,467

American Internat'l Gr

AIG

Financials

$2,415

$11,212

$13,196

$41,650

$50,418

$1,185

Wells Fargo 

WFC

Financials

$2,296

$8,703

$8,827

$38,703

$57,975

$7,796

Wal-Mart Stores

WMT

Consumer Staples

$2,262

$7,893

$7,681

$27,498

-$46,050

$6,150

Bank of America 

BAC

Financials

$2,236

$7,693

$3,982

$17,345

$34,367

$4,777

Johnson & Johnson 

JNJ

Healthcare

$1,890

$9,460

$6,947

$30,241

$40,482

$9,051

Citigroup

C

Financials

$1,781

$10,696

$6,553

$22,555

$14,875

$3,524

Microsoft 

MSFT

Information Technology

$1,765

$11,788

$15,969

$54,876

$114,003

$12,044

Visa

V

Information Technology

$1,708

$6,933

$5,562

$25,317

$40,721

$1,219

Alphabet

GOOGL

Information Technology

$1,618

$2,745

$5,473

$8,218

-$42,412

$0

Intel 

INTC

Information Technology

$1,610

$3,982

$3,588

$25,175

-$8,427

$5,133

Internat'l Bus Machines

IBM

Information Technology

$1,529

$4,599

$4,193

$38,217

$92,256

$5,637

Comcast 

CMCSA

Consumer Discretionary

$1,480

$5,091

$5,801

$22,228

-$28,219

$2,982

Goldman Sachs Group

GS

Financials

$1,466

$5,753

$5,934

$27,600

$50,484

$1,181

Cisco Systems

CSCO

Information Technology

$1,291

$4,304

$4,466

$26,542

$71,971

$5,800

Top 20   



$46,351

$170,449

$165,525

$692,435

$671,639

$97,726

S&P 500



$120,109

$500,754

$585,351

$2,593,531

$4,284,417

$439,791

Top 20 % of S&P 500



38.59%

34.04%

28.28%

26.70%

15.68%

22.22%

   Gross values are not adjusted for float







 

S&P Dow Jones Indices

S&P 500 20 Largest Quarterly Buybacks, $ Millions, as of Q2 2017, no issue was added for Q2 2017

$ MILLIONS

QUARTER

COMPANY

SECTOR


$17,971

Q1 2014

Apple

Information Technology

1

$17,000

Q3 2014

Apple

Information Technology

2

$16,000

Q2 2013

Apple

Information Technology

3

$15,707

Q2 2007

International Business Machines 

Information Technology

4

$13,253

Q3 2015

Apple

Information Technology

5

$12,852

Q2 2012

Johnson & Johnson 

Healthcare

6

$12,318

Q4 2016

Allergan plc (AGN)

Healthcare

7

$12,183

Q3 2012

Johnson & Johnson 

Healthcare

8

$10,851

Q4 2016

Apple

Information Technology

9

$10,723

Q3 2007

Home Depot

Consumer Discretionary

10

$10,166

Q2 2016

Apple

Information Technology

11

$10,000

Q2 2015

Apple

Information Technology

12

$9,859

Q4 2007

Transocean

Energy

13

$9,179

Q4 2006

Exxon Mobil 

Energy

14

$9,465

Q1 2008

Exxon Mobil 

Energy

15

$8,845

Q4 2008

Exxon Mobil 

Energy

16

$8,761

Q2 2008

Exxon Mobil 

Energy

17

$8,663

Q3 2008

Exxon Mobil 

Energy

18

$8,463

Q3 2007

Exxon Mobil 

Energy

19

$8,166

Q1 2014

International Business Machines 

Information Technology

20

$230,425


TOP 20



$7,093

Q2 2017

Apple 

Information Technology

32

 

S&P Dow Jones Indices

S&P 500 Q2 2017 Buyback Report





SECTOR

DIVIDEND

BUYBACK 

COMBINED


YIELD

YIELD

YIELD

Consumer Discretionary

1.56%

3.22%

4.77%

Consumer Staples

3.12%

2.51%

5.63%

Energy

3.08%

0.61%

3.68%

Financials

2.02%

3.73%

5.74%

HealthCare

1.61%

2.66%

4.27%

Industrials

2.20%

2.70%

4.90%

Information Technology

1.48%

2.38%

3.85%

Materials

2.22%

1.01%

3.23%

Real Estate

3.32%

0.44%

3.76%

Telecommunication Services

5.29%

0.18%

5.47%

Utilities

3.34%

0.03%

3.38%

S&P 500

2.12%

2.43%

4.54%

   Uses full values (unadjusted for float)



   Dividends based on indicated; buybacks based on the last 12-months ending Q2,'17

 

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SOURCE S&P Dow Jones Indices

For further information: 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]