2014

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
classified under current assets on the
balance sheet, and represent the
readily available discretionary liquid
assets of a company. Cash is
measured for the S&P Industrials
(Old), which consist of the S&P 500
minus Financials, Utilities and
Transportation issues since these
issues maintain high cash reserves as
part of their normal operating process
[Note: The S&P Industrials (Old) date
back for decades. When the GICS
classifications were developed, one of
the new sectors was the Industrials,
so the former group is referred to as
the S&P Industrials (Old)].

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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