S&P 500 buybacks decline significantly in Q2 2019; expenditures still remain higher than the pre-2018 levels
- Q2 2019 share repurchases were $164.5 billion - 20.1% lower than Q1 2019, 13.7% lower than Q2 2018, and 26.2% lower than the record Q4 2018.
- Apple continues to lead, spending $18.2 billion - down from last quarter's issue level record $23.8 billion, but still the 6th highest expenditure historically.
- Buybacks remain concentrated among the top 20 companies, accounting for 50.4% of the total.
- Buybacks for the 12-month period ending in June 2019 were $797.0 billion - down from $823.2 billion in Q1 2019, but up 23.4% from the same period last year.
- Buyback impact remains broad, as one in four companies used buybacks to reduce their share count by at least four percent and increase their EPS.
NEW YORK, Sept. 16, 2019 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI") announced today that preliminary Q2 2019 S&P 500® stock buybacks, or share repurchases, were $164.5 billion. This was the second consecutive quarterly decline after four consecutive quarters of record buybacks. Q2 2019 buybacks were 20.1% lower than Q1 2019's $205.6 billion, 13.7% lower year-over-year from Q2 2018's $190.6 billion, and 26.2% lower than the Q4 2018 record expenditure of $223.0 billion.
Historical data on S&P 500 buybacks are available at www.spdji.com/indices/equity/sp-500.
Key Takeaways:
- While companies significantly reduced their Q2 2019 buyback expenditures from the record setting quarters of 2018, levels remain higher than 2017 and prior periods.
- The 2018 tax rate decline may have pushed companies to overspend on buybacks, posting a 55% gain over 2017 and a 39% gain over the prior record in 2015.
- The cumulative rolling four quarters of repurchases continued to impact EPS as 24.2% of the issues reduced share counts by at least 4% year-over-year, slightly down from the Q1 2019 24.9% rate, and substantially up from the Q2 2018's 15.6%, giving 1-in-4 issues at least a 4% EPS tailwind.
- S&P 500 Q2 2019 dividends totaled $118.7 billion, up 6.3% from the Q2 2018 of $111.6 billion; Q3 2019 is set to post a new record, in the $122 billion range.
- Total shareholder return of buybacks and dividends for the quarter came in at $283.2 billion, down 12.4% from the Q1 2019 period expenditure of $323.1 billion and down 6.3% from the $302.2 billion reported for Q2 2018.
- Total shareholder return for the 12-month period ending June 2019 declined to $1.269 trillion, from the record 12-month March 2019 level of $1.288 trillion, and was up 17.3% from the year-over-year 12-month Q2 2018 of $1.081 trillion.
"In what may have been a reaction to their tax-inspired record-setting buying spree of 2018, companies significantly pulled back on their Q2 2019 buybacks, said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "While the decline is significant compared to 2018, it remains higher than the pre-2018 levels. Estimates vary, but a base amount of $170 billion a quarter has been emerging as the consensus level of buybacks going forward."
Silverblatt also found that buybacks continue to be top heavy, with the top 20 issues accounting for 51.4% of the buybacks, up a tick from the Q1 2019 51.2%, as the 10-year average is 44.1%.
Q2 2019 GICS® Sector Analysis:
Information Technology buybacks continued to dominate, even as they decreased 20.3% to $54.2 billion compared to $68.0 billion for Q1 2019. Twelve-month expenditures were up 33.8% to $265.8 billion from $198.7 billion spent for the same period in 2018. The sector represents 33.0% of the index's buybacks for the quarter, flat from last quarter.
Materials buyback declined 49.3% to $2.4 billion compared to $4.8 billion for Q1 2018. Utilities declined 40.4%, to 0.9 billion from 1.5 billion in Q1 2019.
Health Care buybacks continued to be volatile, as they decreased 44.5% to $17.1 billion, down from $30.7 billion for Q1 2019, as the 12-months ending in Q2 2019, buybacks were $93.6 billion, up 6.1% from the $88.2 billion spent in the corresponding 2018 period.
Issues:
The five issues with the highest total buybacks for Q2 2019 are:
- Apple (AAPL) again led in buybacks spending $18.2 billion in Q2 2018, ranking 6th in S&P 500 history, as the level was down 23.8% from the record $23.8 billion spent in Q1 2019. Over the past 12-months, Apple has spent $71.4 billion on buybacks, almost twice the value of Ford Motor Company, up from $63.9 billion in the prior 12-month period.
- Bank of America (BAC): $6.5 billion for Q2 2019, up from $6.3 billion for Q1 2019; in the last 12-months they spent $23.0 billion, up from $17.7 billion.
- Oracle (ORCL): $6.3 billion for Q2 2019, down up from their $10.0 billion Q1 2019 expenditure; in the last 12 months they spent $36.6 billion, up from $11.9 billion.
- JP Morgan (JPM): $5.2 billion for Q2 2019, up from the $5.1 billion spent in Q1 2019; in the last 12-months they spent $20.6 billion, up from $19.2 billion.
- Cisco Systems (CSCO): $4.9 billion for Q2 2019, down from $6.1 billion for Q1 2019; in the last 12-months they spent $21.6 billion, up from $18.3 billion.
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 and estimates in bold) | ||||||||
PERIOD | MARKET | OPERATING | AS REPORTED | DIVIDEND & | ||||
VALUE | EARNINGS | EARNINGS | DIVIDENDS | BUYBACKS | DIVIDEND | BUYBACK | BUYBACK | |
$ BILLIONS | $ BILLIONS | $ BILLIONS | $ BILLIONS | $ BILLIONS | YIELD | YIELD | YIELD | |
12 Mo Jun,'19 Prelim. | $24,423.49 | $1,295.01 | $1,132.67 | $471.54 | $797.03 | 1.93% | 3.26% | 5.19% |
12 Mo Jun,'18 | $23,036.32 | $1,196.08 | $1,043.63 | $435.69 | $645.81 | 1.89% | 2.80% | 4.69% |
2018 | $21,026.90 | $1,281.66 | $1,119.43 | $456.31 | $806.41 | 2.17% | 3.84% | 6.01% |
2017 | $22,821.24 | $1,066.00 | $940.86 | $419.77 | $519.40 | 1.84% | 2.28% | 4.12% |
2016 | $19,267.93 | $919.85 | $818.55 | $397.21 | $536.38 | 2.06% | 2.78% | 4.85% |
6/28/2019 Prelim | $24,423 | $335.58 | $291.25 | $118.68 | $164.48 | 1.93% | 3.26% | 5.19% |
3/29/2019 | $23,619 | $316.48 | $291.23 | $117.33 | $205.81 | 1.97% | 3.49% | 5.45% |
12/31/2018 | $21,027 | $293.82 | $242.91 | $119.81 | $222.98 | 2.17% | 3.84% | 6.01% |
9/30/2018 | $24,579 | $349.04 | $306.70 | $115.72 | $203.76 | 1.81% | 2.93% | 4.75% |
6/30/2018 | $23,036 | $327.53 | $288.55 | $111.60 | $190.62 | 1.89% | 2.80% | 4.69% |
3/29/2018 | $22,496 | $311.26 | $281.28 | $109.18 | $189.05 | 1.90% | 2.56% | 4.46% |
12/29/2017 | $22,821 | $288.93 | $230.12 | $109.46 | $136.97 | 1.84% | 2.28% | 4.12% |
9/29/2017 | $21,579 | $268.35 | $243.68 | $105.45 | $129.17 | 1.92% | 2.40% | 4.32% |
6/30/2017 | $20,762 | $261.39 | $231.40 | $104.01 | $120.11 | 1.96% | 2.41% | 4.37% |
3/31/2017 | $20,276 | $247.32 | $235.65 | $100.86 | $133.15 | 1.98% | 2.51% | 4.49% |
12/31/2016 | $19,268 | $240.11 | $207.93 | $103.82 | $135.29 | 2.06% | 2.78% | 4.85% |
9/30/2016 | $18,742 | $247.98 | $219.46 | $98.43 | $112.20 | 2.10% | 2.92% | 5.01% |
6/30/2016 | $18,193 | $222.77 | $201.79 | $98.30 | $127.50 | 2.14% | 3.22% | 5.36% |
3/31/2016 | $17,958 | $208.99 | $189.37 | $96.67 | $161.39 | 2.15% | 3.28% | 5.43% |
12/31/2015 | $17,900 | $201.95 | $163.76 | $99.39 | $145.88 | 2.14% | 3.20% | 5.33% |
9/30/2015 | $16,917 | $224.14 | $204.58 | $95.07 | $150.58 | 2.22% | 3.30% | 5.52% |
6/30/2015 | $18,219 | $230.84 | $201.35 | $94.45 | $131.56 | 2.03% | 3.04% | 5.07% |
S&P Dow Jones Indices | |||||||
S&P 500 SECTOR BUYBACKS | |||||||
SECTOR $ MILLIONS | Q2,'18 | Q1,'19 | Q2,'18 | 12MoJun,'19 | 12MoJun,'18 | 5-YEARS | 10-YEARS |
Consumer Discretionary | $15,764 | $17,721 | $22,656 | $78,825 | $86,352 | $429,464 | $728,807 |
Consumer Staples | $7,114 | $9,786 | $6,580 | $36,512 | $39,904 | $211,298 | $439,981 |
Energy | $4,552 | $4,294 | $4,285 | $24,874 | $21,922 | $92,142 | $263,972 |
Financials | $37,819 | $42,845 | $29,968 | $166,948 | $131,925 | $593,911 | $813,978 |
Healthcare | $17,066 | $30,749 | $27,241 | $93,633 | $88,210 | $408,431 | $686,549 |
Industrials | $16,967 | $19,426 | $23,426 | $74,578 | $64,702 | $356,504 | $543,959 |
Information Technology | $54,210 | $67,986 | $71,511 | $265,787 | $198,677 | $864,307 | $1,333,335 |
Materials | $2,420 | $4,771 | $3,237 | $16,062 | $8,998 | $67,230 | $108,265 |
Real Estate | $555 | $409 | $884 | $2,963 | $3,888 | $9,334 | $9,334 |
Communication Services | $7,132 | $6,345 | $419 | $33,125 | $601 | $41,328 | $72,197 |
Utilities | $882 | $1,479 | $413 | $3,720 | $631 | $8,517 | $18,596 |
TOTAL | $164,481 | $205,811 | $190,621 | $797,028 | $645,811 | $3,082,465 | $5,018,974 |
S&P Dow Jones Indices | ||||||||
S&P 500 20 LARGEST Q2 2019 BUYBACKS, $ MILLIONS | ||||||||
Company | Ticker | Sector | Q2 2019 | 12-Months | 12-Months | 5-Year | 10-Year | Indicated |
Buybacks | Jun,'19 | Jun,'18 | Buybacks | Buybacks | Dividend | |||
$ Million | $ Million | $ Million | $ Million | $ Million | $ Million | |||
Apple | AAPL | Information Technology | $18,154 | $71,443 | $63,924 | $247,481 | $302,414 | $14,917 |
Bank of America | BAC | Financials | $6,507 | $23,041 | $17,673 | $53,164 | $58,059 | $7,361 |
Oracle | ORCL | Information Technology | $6,301 | $36,643 | $11,853 | $70,970 | $99,812 | $4,621 |
JPMorgan | JPM | Financials | $5,210 | $20,645 | $19,210 | $63,391 | $83,456 | $11,678 |
Cisco Systems | CSCO | Information Technology | $4,936 | $21,579 | $18,250 | $53,425 | $85,891 | $5,993 |
Wells Fargo | WFC | Financials | $4,906 | $24,691 | $11,734 | $63,997 | $79,914 | $10,187 |
Microsoft | MSFT | Information Technology | $4,633 | $19,543 | $10,721 | $72,464 | $112,993 | $14,100 |
Johnson Controls Internat'l | JCI | Industrials | $4,125 | $5,154 | $484 | $8,011 | $9,537 | $828 |
Alphabet | GOOGL | Communication Services | $3,577 | $11,452 | $6,326 | $25,996 | $26,914 | $0 |
Citigroup | C | Financials | $3,464 | $13,043 | $16,071 | $49,206 | $52,920 | $4,717 |
Intel | INTC | Information Technology | $3,049 | $10,037 | $6,920 | $34,109 | $62,342 | $5,641 |
Booking Holdings | BKNG | Consumer Discretionary | $2,718 | $9,557 | $3,178 | $18,043 | $19,578 | $0 |
Johnson & Johnson | JNJ | Health Care | $2,486 | $8,971 | $2,715 | $36,423 | $58,932 | $10,089 |
Amgen | AMGN | Health Care | $2,415 | $9,426 | $15,730 | $32,349 | $51,126 | $3,538 |
Biogen | BIIB | Health Care | $2,402 | $4,410 | $3,000 | $15,325 | $20,316 | $0 |
Visa | V | Information Technology | $2,152 | $8,178 | $7,418 | $31,863 | $44,473 | $1,739 |
Lowe's Companies | LOW | Consumer Discretionary | $1,944 | $3,961 | $2,535 | $18,373 | $34,586 | $1,722 |
Mastercard | MA | Information Technology | $1,921 | $5,920 | $4,824 | $20,322 | $28,488 | $1,498 |
Honeywell Internat'l | HON | Industrials | $1,900 | $4,946 | $3,601 | $13,875 | $16,396 | $2,387 |
Walgreens Boots Alliance | FB | Communication Services | $1,752 | $12,083 | $10,230 | $24,262 | $28,017 | $0 |
Top 20 | $84,552 | $324,723 | $236,397 | $953,050 | $1,276,164 | $101,017 | ||
S&P 500 | $164,481 | $797,028 | $645,811 | $3,082,465 | $5,073,953 | $530,924 | ||
Top 20 % of S&P 500 | 51.40% | 40.74% | 36.60% | 30.92% | 25.15% | 19.03% | ||
Gross values are not adjusted for float | ||||||||
S&P Dow Jones Indices | ||||
S&P 500 20 Largest Quarterly Buybacks, $ Millions, as of Q2 2019; Apple added at #6 | ||||
$ MILLIONS | QUARTER | COMPANY | SECTOR | |
$23,811 | Q1 2019 | Apple | Information Technology | 1 |
$22,908 | Q1 2018 | Apple | Information Technology | 2 |
$21,860 | Q2 2018 | Apple | Information Technology | 3 |
$21,162 | Q2 2006 | QUALCOMM | Information Technology | 4 |
$19,364 | Q3 2018 | Apple | Information Technology | 5 |
$18,154 | Q2 2019 | Apple | Information Technology | 6 |
$18,036 | Q1 2014 | Apple | Information Technology | 7 |
$17,319 | Q3 2014 | Apple | Information Technology | 8 |
$16,413 | Q2 2013 | Apple | Information Technology | 9 |
$15,707 | Q3 2007 | International Business Machines | Information Technology | 10 |
$13,420 | Q3 2015 | Apple | Information Technology | 11 |
$12,852 | Q4 2013 | Johnson & Johnson | Healthcare | 12 |
$12,318 | Q4 2016 | Allergan plc (AGN) | Healthcare | 13 |
$12,183 | Q2 2012 | Johnson & Johnson | Healthcare | 14 |
$11,480 | Q4 2016 | Apple | Information Technology | 15 |
$11,133 | Q4 2017 | Apple | Information Technology | 16 |
$10,776 | Q2 2016 | Apple | Information Technology | 17 |
$10,724 | Q2 2015 | Apple | Information Technology | 18 |
$10,723 | Q1 2016 | Home Depot | Consumer Discretionary | 19 |
$10,697 | Q1 2018 | Amgen | Healthcare | 20 |
S&P Dow Jones Indices | ||||
S&P 500 Q2 2019 Buyback Report | ||||
SECTOR | DIVIDEND | BUYBACK | COMBINED | |
YIELD | YIELD | YIELD | ||
Consumer Discretionary | 1.43% | 3.12% | 4.54% | |
Consumer Staples | 3.74% | 1.97% | 5.71% | |
Energy | 4.03% | 2.11% | 6.15% | |
Financials | 2.53% | 5.04% | 7.58% | |
HealthCare | 1.87% | 2.77% | 4.64% | |
Industrials | 2.10% | 3.22% | 5.32% | |
Information Technology | 1.52% | 4.90% | 6.42% | |
Materials | 2.35% | 2.46% | 4.82% | |
Real Estate | 3.17% | 0.38% | 3.55% | |
Communications Services | 1.60% | 1.50% | 3.10% | |
Utilities | 3.18% | 0.44% | 3.62% | |
S&P 500 | 2.18% | 3.25% | 5.43% | |
Uses full values (unadjusted for float) | ||||
Dividends based on indicated; buybacks based on the last 12-months ending Q2,'19 | ||||
Share Count Reduction (SCR) | SCR | SCR |
(Y/Y diluted shares used for EPS) | >=4% | <=-4% |
Q2 2019 | 8.00% | 24.20% |
Q1 2019 | 8.03% | 24.90% |
Q4 2018 | 8.45% | 18.71% |
Q3 2018 | 6.43% | 17.67% |
Q2 2018 | 6.20% | 15.60% |
Q1 2018 | 7.01% | 13.63% |
Q4 2017 | 6.83% | 15.06% |
Q3 2017 | 8.62% | 14.23% |
Q2 2017 | 10.00% | 14.00% |
Q1 2017 | 12.00% | 14.80% |
Q4 2016 | 10.48% | 19.35% |
Q3 2016 | 9.94% | 23.73% |
Q2 2016 | 10.48% | 26.61% |
Q1 2016 | 10.06% | 28.17% |
Q4 2015 | 9.48% | 25.81% |
Q3 2015 | 9.64% | 22.69% |
Q2 2015 | 9.04% | 21.08% |
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SOURCE S&P Dow Jones Indices
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