S&P 500 2014 Buybacks Post 16.3% Increase

Share Count Reductions Continue as 20% of the Index Add a Tail Wind to EPS

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Mar 23, 2015, 09:30 ET

NEW YORK, March 23, 2015 /PRNewswire/ -- S&P Dow Jones Indices announced today that preliminary results show that S&P 500^® fourth quarter 2014 stock buybacks, or share repurchases, decreased 8.7% to $132.6 billion down from the $145.2 billion spent on share repurchases during the third quarter of this year. Historical S&P 500 buyback data can be found at: www.spdji.com/indices/equity/sp-500.

According to S&P Dow Jones Indices:

The $132.6 billion Q4 spend represents a 2.5% increase from the $129.4 billion spent during the fourth quarter of 2013.
For fiscal year 2014, S&P 500 issues increased their buyback expenditures by 16.3% to $553.3 billion from $475.6 billion posted in 2013.
The high mark was reached in 2007, when companies spent $589.1 billion.
The recession low point was $137.6 billion, recorded in 2009.

"Share count reduction continues to be the market takeaway," says Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "It has significantly increased earnings-per-share (EPS) for 20% of the index issues in each of the past four quarters. While fourth quarter expenditures were down 8.7%, the number of issues reducing their share count by at least 4% year-over-year, and therefore increasing their EPS by at least that amount, continues to be in the 20% area – a significant level."

Additionally, S&P Dow Jones Indices data shows:

More issues reduced their share count this quarter than last, with 308 doing so in Q4, up from 257 in Q3 and 276 in Q4 2013.
Significant changes (generally considered 1% or greater for the quarter) continued to strongly favor reductions, and also increased, as 117 issues reduced their share count by at least 1%, compared to last quarter's 101 and the 112 which did so in Q4 2013.
Share reduction change impacts of at least 4% (Q4 2014 over Q4 2013), which can be seen in EPS comparisons, were flat at 99 in Q4 2014 from Q3, but up from the 83 posted in Q4 2013.

Total Shareholder Returns:

Silverblatt also notes that total shareholders' returns, through regular cash dividends, as well as buybacks, continues to increase and set records. For the year ended December 2014, buyback and dividend expenditures combined, reached a new record high of $903.7 billion, up from the $787.4 billion spent in 2013.

"While the $350.4 billion in dividends for the year set a record, the $553.3 billion in buybacks, which represents 61.2% of the total shareholder return, failed to reach the 2007 buyback bonanza heyday high of $589.1 billion," comments Silverblatt.

Silverblatt stated that issues had a record amount of cash reserves at the end of 2014, and that Q1 2015 cash dividends are on its way to post yet another record quarter, after its record 2014 payment.

"The shareholder return trend has been strong and appears to be increasing," adds Silverblatt. "Based on the recent bank declarations 2015 may easily be another record year for dividends, potentially, its fifth consecutive annual double-digit gain. Depending on the market, it may be a record year for buybacks as well."

Sectors:

On a sector basis, Information Technology continued to dominate buybacks, although its percentage of the Q4 2014 buybacks declined to 24.2% from last quarter's 29.6%. The decline of $10.9 billion can be attributed to Apple, which purchased $5 billion in the fourth quarter, down from $17 billion in the third quarter.

For the year, Apple led the Index with a record setting $45 billion in purchases, up 73.5% from its $25.9 billion 2013 purchases. Exxon Mobile came in a distant second, at $13.2 billion, down 17.6% from its 2013 $16 billion expenditure, with Intel coming in third, spending $10.8 billion, significantly up from its 2013 $2.1 billion expenditure.

For more information, please visit www.spdji.com

S&P 500, $ U.S. BILLIONS, preliminary values 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

12/30/2014	$18,245	$262.30	$243.43	$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
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
Source: S&P Dow Jones Indices

S&P 500 SECTOR BUYBACKS
SECTOR $ MILLIONS	Q4,'14	Q3,'14	Q4,'13	2014	2013	5-YEARS	2007 YR	Q2,'09	Q3,'07
							(high)	(low)	(high)
Consumer Discretionary	$22,841	$21,327	$18,080	$81,747	$70,226	$333,805	$80,435	$2,350	$34,902
Consumer Staples	$11,817	$9,970	$11,309	$42,347	$42,822	$233,872	$51,589	$4,013	$16,088
Energy	$10,311	$8,810	$12,236	$40,928	$40,950	$183,777	$67,031	$5,343	$14,717
Financials	$19,371	$20,441	$16,077	$75,404	$58,547	$254,629	$107,328	$1,170	$27,762
Healthcare	$15,104	$13,930	$14,525	$60,069	$61,959	$296,227	$63,775	$4,699	$18,660
Industrials	$15,535	$16,498	$16,230	$66,718	$53,735	$214,618	$54,806	$1,681	$17,521
Information Technology	$32,046	$42,906	$34,528	$154,703	$121,448	$518,192	$121,974	$4,757	$23,904
Materials	$5,007	$10,866	$3,899	$28,179	$10,306	$56,320	$13,586	$159	$6,503
Telecommunication Services	$92	$286	$2,228	$2,267	$14,866	$30,991	$17,627	$13	$3,947
Utilities	$511	$158	$300	$913	$728	$9,239	$10,963	$10	$7,943
TOTAL	$132,634	$145,193	$129,411	$553,275	$475,587	$2,131,670	$589,113	$24,195	$171,947

SECTOR BUYBACK MAKEUP %	Q4,'14	Q3,'14	Q4,'13	2014	2013	5-YEARS	2007 YR	Q2,'09	Q3,'09
Consumer Discretionary	17.22%	14.69%	13.97%	14.78%	14.77%	15.66%	13.65%	9.71%	20.30%
Consumer Staples	8.91%	6.87%	8.74%	7.65%	9.00%	10.97%	8.76%	16.59%	9.36%
Energy	7.77%	6.07%	9.45%	7.40%	8.61%	8.62%	11.38%	22.08%	8.56%
Financials	14.60%	14.08%	12.42%	13.63%	12.31%	11.95%	18.22%	4.84%	16.15%
Healthcare	11.39%	9.59%	11.22%	10.86%	13.03%	13.90%	10.83%	19.42%	10.85%
Industrials	11.71%	11.36%	12.54%	12.06%	11.30%	10.07%	9.30%	6.95%	10.19%
Information Technology	24.16%	29.55%	26.68%	27.96%	25.54%	24.31%	20.70%	19.66%	13.90%
Materials	3.78%	7.48%	3.01%	5.09%	2.17%	2.64%	2.31%	0.66%	3.78%
Telecommunication Services	0.07%	0.20%	1.72%	0.41%	3.13%	1.45%	2.99%	0.05%	2.30%
Utilities	0.39%	0.11%	0.23%	0.16%	0.15%	0.43%	1.86%	0.04%	4.62%
TOTAL	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%
Source: S&P Dow Jones Indices

Largest S&P 500 2014 buybacks:
Company	Sector	2014	2013	5-YEAR	10-YEAR
		Buybacks	Buybacks	Buybacks	Buybacks
		$ Million	$ Million	$ Million	$ Million
Apple	Information Technology	$45,001	$25,939	$72,890	$73,245
Exxon Mobil	Energy	$13,183	$15,998	$85,397	$220,435
Intel	Information Technology	$10,792	$2,147	$34,125	$61,100
International Business Machines	Information Technology	$9,998	$10,307	$62,721	$114,146
Wells Fargo	Financials	$9,414	$5,356	$21,195	$35,580
Oracle	Information Technology	$8,099	$10,750	$32,433	$45,176
Microsoft	Information Technology	$8,048	$6,371	$40,155	$120,963
Merck	Healthcare	$7,703	$6,516	$20,324	$26,496
Johnson & Johnson	Healthcare	$7,124	$3,538	$27,618	$49,487
The Home Depot	Consumer Discretionary	$7,000	$8,546	$25,608	$46,315
Monsanto	Materials	$6,817	$1,629	$9,123	$10,342
Cisco Systems	Information Technology	$6,419	$8,235	$31,787	$69,588
Procter & Gamble	Consumer Staples	$6,254	$5,005	$30,378	$74,010
Walt Disney	Consumer Discretionary	$6,112	$4,761	$22,569	$40,539
Boeing	Industrials	$6,001	$1,801	$7,802	$16,218
3M	Industrials	$5,652	$5,212	$16,623	$26,238
Goldman Sachs Group	Financials	$5,469	$6,175	$26,515	$52,432
Gilead Sciences	Healthcare	$5,349	$582	$13,004	$17,004
Top 20		$174,435	$128,868	$580,267	$1,099,315
S&P 500		$553,275	$475,587	$2,131,670	$3,979,128
Top 20 % of S&P 500		31.53%	27.10%	27.22%	27.63%
Source: S&P Dow Jones Indices

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SOURCE S&P Dow Jones Indices