S&P 500 Stock Buybacks Jump 59%; $30 billion First Quarter Increase Pushes Cash Holdings Down
NEW YORK, June 18, 2014 /PRNewswire/ -- S&P Dow Jones Indices announced today that preliminary results show that S&P 500® stock buybacks, or share repurchases, increased 59.3% to $159.3 billion during the first quarter of 2014, up from the $100.0 billion spent on share repurchases during the first quarter of 2013. The $159.3 billion also represents a 23.1% increase over Q4 2013 stock buyback activity.
According to S&P Dow Jones Indices, for the 12 months ending March 2014, S&P 500 issues increased their buyback expenditures by 29.0% to $534.9 billion from the $414.6 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.
"Companies reached into their deep pockets this quarter and spent an extra $30 billion over the prior quarter on buybacks, buying more than they issued and reducing their share count," says Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "The lower share count pushed up earnings per share significantly (defined as a 4% impact) for 99 issues in the S&P 500, with the Q1 poster child being Apple."
Silverblatt notes that Apple set a record buyback expenditure of $18 billion in the first quarter, beating out the prior $16 billion record, which it held from Q2 2013. As a result of the large buyback, Apple reduced its average diluted shares by 7.0% year-over-year leading to a 7.1% increase in net earnings resulting in a 15.2% gain in EPS.
S&P Dow Jones Indices' data show that more companies continued to reduce their share count, with 290 doing so in the first quarter up from 276 in the fourth quarter. Significant changes (generally considered 1% or greater for the quarter) continued to strongly favor reductions, as 123 issues reduced their share count by at least 1% (up from last quarter's 112 issues). Share change impacts of at least 4% (Q1 2014 over Q1 2013), which can be seen in EPS comparisons, numbered 99 in the first quarter, up from the prior quarter's 83.
"It's not just what you buy, but what you issue," adds Silverblatt. "This quarter companies decided to buy more. The key question for Q2 is did they do it to boost a poor Q1 earnings period that was impacted by weather conditions, or was it a shift towards more enhanced earnings via share count reduction, similar to what we experienced in 2006 and 2007?"
Silverblatt also comments that companies continue to increase their total shareholders' returns through regular cash dividends, as well as buybacks. Buyback and dividend expenditures combined reached a new record high in the first quarter of $241.2 billion, replacing the fourth quarter of 2007 record when $233.2 billion was spent on buybacks and dividends. Of the 404 issues which reported buybacks over the past year, 346 companies paid a cash dividend, with 217 of them spending more on buybacks than dividends. Buyback program authorizations have continued to increase.
"Keeping up with the current bull market means that companies have to pay more for the same number of shares, and activists are demanding more of a return, both via dividends and buybacks," notes Silverblatt. "For buybacks the true test is share count reduction, and we are seeing more companies achieve share count reduction as they increase their EPS."
On a sector basis, Information Technology increased its dominance of buybacks, accounting for 30.9% of all buybacks in Q1 (up from 26.7% in Q4). Apple led the Index with its $18 billion record setting quarter and International Business Machines (IBM) was second at $8.2 billion in buybacks. The top five were rounded out by Exxon Mobil ($3.9 billion), FedEx ($2.8 billion), and Boeing Company ($2.5 billion).
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.
| S&P Dow Jones Indices |
|||||||||
| S&P 500, $ U.S. BILLIONS, preliminary values in bold italics |
|||||||||
| 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 |
|
| 3/31/2014 Prelim. |
$16,700 |
$243.76 |
$221.64 |
$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 |
| 03/30/2008 |
$11,511 |
$144.63 |
$135.24 |
$61.72 |
$113.90 |
2.17% |
5.08% |
7.25% |
$175.62 |
| S&P Dow Jones Indices |
|||||
| S&P 500 20 LARGEST Q1 2014 BUYBACKS, $ MILLIONS |
|||||
| Company |
Ticker |
Sector |
Q1,'14 |
12 Mo Mar,'14 |
5-Years |
| Buybacks |
Buybacks |
Buybacks |
|||
| $ Mil |
$ Mil |
$ Mil |
|||
| Apple |
AAPL |
Information Technology |
$17,971 |
$43,910 |
$45,860 |
| Internat'l Business |
IBM |
Information Technology |
$8,166 |
$19,432 |
$70,105 |
| Exxon Mobil |
XOM |
Energy |
$3,860 |
$14,237 |
$87,925 |
| FedEx |
FDX |
Industrials |
$2,765 |
$3,984 |
$4,427 |
| Boeing |
BA |
Industrials |
$2,500 |
$4,301 |
$4,301 |
| Cisco Systems |
CSCO |
Information Technology |
$2,321 |
$9,610 |
$31,737 |
| Abbott Laboratories |
ABT |
Healthcare |
$2,192 |
$2,872 |
$6,374 |
| Oracle |
ORCL |
Information Technology |
$2,040 |
$10,658 |
$27,138 |
| CBS |
CBS |
Consumer Discretionary |
$2,032 |
$2,928 |
$6,255 |
| Corning |
GLW |
Information Technology |
$1,901 |
$3,468 |
$4,968 |
| Microsoft |
MSFT |
Information Technology |
$1,845 |
$7,188 |
$39,381 |
| eBay |
EBAY |
Information Technology |
$1,811 |
$2,678 |
$5,827 |
| Caterpillar |
CAT |
Industrials |
$1,738 |
$3,738 |
$3,738 |
| Goldman Sachs Group |
GS |
Financials |
$1,719 |
$6,369 |
$22,765 |
| 3M |
MMM |
Industrials |
$1,708 |
$6,115 |
$12,696 |
| Mosaic |
MOS |
Materials |
$1,678 |
$1,678 |
$2,840 |
| MasterCard |
MA |
Information Technology |
$1,669 |
$3,346 |
$7,008 |
| Celgene |
CELG |
Healthcare |
$1,569 |
$3,289 |
$8,958 |
| Walt Disney |
DIS |
Consumer Discretionary |
$1,536 |
$5,447 |
$18,052 |
| Procter & Gamble |
PG |
Consumer Staples |
$1,501 |
$6,506 |
$28,045 |
| Top 20 |
$62,521 |
$161,754 |
$438,400 |
||
| S&P 500 |
$159,277 |
$534,897 |
$1,844,533 |
||
| Top 20 % of S&P 500 |
39.25% |
30.24% |
23.77% |
||
| S&P Dow Jones Indices |
||||||
| S&P 500 SECTOR BUYBACKS |
||||||
| SECTOR $ MILLIONS |
Q1,'14 |
Q4,'13 |
Q1,'13 |
12MO MAR,'14 |
12 MO MAR,'13 |
5-YEARS |
| Consumer Discretionary |
$18,610 |
$18,080 |
$15,328 |
$73,508 |
$63,033 |
$282,724 |
| Consumer Staples |
$12,031 |
$11,309 |
$10,385 |
$44,469 |
$46,033 |
$224,168 |
| Energy |
$13,091 |
$12,236 |
$8,334 |
$45,707 |
$33,921 |
$168,457 |
| Financials |
$18,262 |
$16,077 |
$13,025 |
$63,784 |
$56,493 |
$203,908 |
| Healthcare |
$15,814 |
$14,525 |
$16,766 |
$61,006 |
$73,995 |
$267,597 |
| Industrials |
$22,024 |
$16,230 |
$8,980 |
$66,779 |
$36,170 |
$176,474 |
| Information Technology |
$49,182 |
$34,528 |
$17,585 |
$153,045 |
$79,878 |
$443,216 |
| Materials |
$8,534 |
$3,899 |
$2,919 |
$15,920 |
$5,687 |
$37,422 |
| Telecommunication Services |
$1,565 |
$2,228 |
$6,485 |
$9,947 |
$17,200 |
$30,557 |
| Utilities |
$164 |
$300 |
$160 |
$732 |
$2,171 |
$10,009 |
| TOTAL |
$159,277 |
$129,411 |
$99,967 |
$534,897 |
$414,583 |
$1,844,533 |
| SECTOR BUYBACK MAKEUP % |
Q1,'14 |
Q4,'13 |
Q1,'13 |
12MO MAR,'14 |
12 MO MAR,'13 |
5-YEARS |
| Consumer Discretionary |
11.68% |
13.97% |
15.33% |
13.74% |
15.20% |
15.33% |
| Consumer Staples |
7.55% |
8.74% |
10.39% |
8.31% |
11.10% |
12.15% |
| Energy |
8.22% |
9.45% |
8.34% |
8.55% |
8.18% |
9.13% |
| Financials |
11.47% |
12.42% |
13.03% |
11.92% |
13.63% |
11.05% |
| Healthcare |
9.93% |
11.22% |
16.77% |
11.41% |
17.85% |
14.51% |
| Industrials |
13.83% |
12.54% |
8.98% |
12.48% |
8.72% |
9.57% |
| Information Technology |
30.88% |
26.68% |
17.59% |
28.61% |
19.27% |
24.03% |
| Materials |
5.36% |
3.01% |
2.92% |
2.98% |
1.37% |
2.03% |
| Telecommunication Services |
0.98% |
1.72% |
6.49% |
1.86% |
4.15% |
1.66% |
| Utilities |
0.10% |
0.23% |
0.16% |
0.14% |
0.52% |
0.54% |
| TOTAL |
100.00% |
100.00% |
100.00% |
100.00% |
100.00% |
100.00% |
| S&P Dow Jones Indices |
Cash and equivalents (cash) are |
|||||||
| S&P 500 INDUSTRIAL (OLD) CASH AND EQUIVALENT LEVELS |
||||||||
| DATE |
CASH & |
% HELD |
% SHORT-TERM |
CASH % |
LTD % OF |
CASH % OF |
||
| EQUIVALENT |
AS CASH |
SECURITIES |
OF LTD |
MARKET |
MARKET |
|||
| $ MILLIONS |
VALUE |
VALUE |
||||||
| 3/31/2014 Prelim. |
$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% |
||
| 03/31/2010 |
$836,771 |
67.10% |
32.90% |
44.48% |
22.79% |
10.14% |
||
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.
Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC, 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
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