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.

News provided by

S&P Dow Jones Indices

Sep 16, 2019, 11:30 ET

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 6^thin 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
Facebook	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%

ABOUT S&P DOW JONES INDICES

S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has been innovating and developing indices across the spectrum of asset classes helping to define the way investors measure and trade the markets.

S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit: www.spdji.com.

SOURCE S&P Dow Jones Indices