S&P 500 Stock Buybacks Rebound 128% From Q3 2009
Share Repurchases Increase for the 5th Quarter in a Row
NEW YORK, Dec. 20, 2010 /PRNewswire/ -- Standard & Poor's, the world's leading index provider, announced today that preliminary results show that S&P 500 stock buybacks for the third quarter of 2010 increased 128.3% to $79.56 billion from the $34.85 billion registered during the third quarter of 2009. The $79.56 billion in share repurchases represents a 2.5% increase over the second quarter of 2010, and marks the fifth quarter in a row that S&P 500 companies have increased their stock buyback activity.
"The 128% increase in share repurchases marks the full return of corporate participation in the equity markets," says Howard Silverblatt, Senior Index Analyst at S&P Indices. "While we do not expect a return to the 2005-2007 buyback bonanza, we do see this as a strong, positive sign for the overall health of the market."
Silverblatt also determined that over the past three quarters, the number of companies taking part in a stock buyback program has leveled off, with 261 companies purchasing their shares during the third quarter compared to 257 in the second quarter and 251 in the first quarter of this year.
On a sector basis, Silverblatt notes that the Information Technology sector continues to dominate the buyback market accounting for 28.6% of all buybacks (up from 27.3% in the second quarter), with Health Care declining significantly to 13.4% from 19.0% last quarter. Energy increased from 4.0% of all buybacks to 6.4%.
Three of the top four expenditures for buybacks during the third quarter were posted by Information Technology issues, with Microsoft spending $4.4 billion, Hewlett-Packard spending $4.0 billion and International Business Machines spending $3.7 billion. Wal-Mart Stores (Consumer Staples) with $3.9 billion and Exxon Mobil (Energy) with $3.3 billion) round out the top five.
Silverblatt noted that over the past three quarters several companies have increased their buybacks in excess of their current use for employee options and M&A activity. "For a few issues will see an earnings impact on their upcoming fourth quarter earnings per share in comparison to their fourth quarter EPS of last year due to share count reduction," notes Silverblatt.
For the fourth quarter of 2010, Silverblatt expects buybacks to increase slightly. For the first part of 2011, he believes that companies will continue to be cautious with their buyback plans, and refrain from purchasing an excessive amount of shares.
Historical S&P 500 buyback data can be found at: www.marketattributes.standardandpoors.com.
S&P Indices | |||||||
S&P 500, $ U.S. BILLIONS | |||||||
PERIOD | MARKET | OPERATING | AS REPORTED | DIVIDEND & | |||
VALUE | EARNINGS | EARNINGS | DIVIDENDS | BUYBACKS | BUYBACK | ||
$ BILLIONS | $ BILLIONS | $ BILLIONS | $ BILLIONS | $ BILLIONS | YIELD | ||
09/30/2010 | $10,336 | $235.75 | $194.91 | $51.26 | $79.56 | 4.45% | |
06/30/2010 | $9,323 | $189.04 | $178.00 | $50.44 | $77.64 | 4.41% | |
03/31/2010 | $10,560 | $174.91 | $157.85 | $49.28 | $55.26 | 3.36% | |
12/31/2009 | $9,928 | 152.77 | $135.14 | $49.04 | $47.82 | 3.36% | |
09/30/2009 | $9,337 | $139.37 | $130.37 | $47.21 | $34.85 | 3.71% | |
06/30/2009 | $8,045 | $120.85 | $118.22 | $47.63 | $24.20 | 5.17% | |
03/31/2009 | $6,928 | $87.78 | $65.29 | $51.73 | $30.78 | 7.13% | |
12/31/2008 | $7,852 | -$0.78 | -$202.11 | $62.19 | $48.12 | 7.48% | |
09/30/2008 | $10,181 | $142.90 | $86.16 | $61.44 | $89.71 | 6.73% | |
S&P Indices | ||||
S&P 500 20 LARGEST Q3 2010 BUYBACKS, $ MILLIONS | ||||
Company | SECTOR | Q3 2010 | BUYBACKS | |
Q4,'04-Q3,'10 | ||||
Microsoft Corp | Information Technology | $4,399 | $92,038 | |
Hewlett-Packard Co | Information Technology | $3,963 | $47,982 | |
Wal-Mart Stores Inc | Consumer Staples | $3,860 | $31,203 | |
International Business Machines | Information Technology | $3,653 | $65,383 | |
Exxon Mobil Corp | Energy | $3,272 | $146,089 | |
Procter & Gamble Co | Consumer Staples | $3,010 | $52,243 | |
Cisco Systems, Inc | Information Technology | $2,701 | $47,827 | |
Fidelity Natl Information Svs | Information Technology | $2,507 | $2,871 | |
JPMorgan Chase & Co | Financials | $2,177 | $17,090 | |
Gilead Sciences Inc | Healthcare | $1,553 | $7,408 | |
DIRECTV | Consumer Discretionary | $1,372 | $11,453 | |
Walt Disney Co | Consumer Discretionary | $1,180 | $21,150 | |
Pepsico, Inc | Consumer Staples | $1,110 | $19,450 | |
Philip Morris International | Consumer Staples | $1,035 | $14,744 | |
Walgreen Co | Consumer Staples | $1,002 | $4,844 | |
MedcoHealth Solutions Inc | Healthcare | $904 | $10,103 | |
ConocoPhillips | Energy | $868 | $19,360 | |
Yahoo! Inc | Information Technology | $868 | $6,912 | |
Goldman Sachs Group | Financials | $819 | $29,545 | |
McDonald's Corp | Consumer Discretionary | $798 | $16,072 | |
Top 20 | $41,051 | $663,766 | ||
S&P 500 | $79,556 | $2,126,332 | ||
Top 20 % of S&P 500 | 51.60% | 31.22% | ||
About S&P Indices
S&P Indices, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1.25 trillion is directly indexed to Standard & Poor's family of indices, which includes the S&P 500, the world's most followed stock market index, the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry's most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds. For more information, please visit www.standardandpoors.com/indices.
SOURCE Standard & Poor's
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