S&P 500 Stock Buybacks Up 63% from Q1 2010; Up Just 4% from Q4 2010

NEW YORK, June 29, 2011 /PRNewswire/ -- S&P Indices announced today that preliminary results show that S&P 500 stock buybacks increased 62.6% to $89.8 billion during the first quarter of 2011, up from the $55.3 billion registered during the first quarter of 2010. The quarter represents the seventh consecutive quarterly increase for buybacks, but only a modest 4.0% increase over the fourth quarter of 2010 ($86.4 billion).

"The 4.0% increase in buybacks from last quarter is significantly less than the 8.1% average price increase, and translates into fewer shares being repurchased," says Howard Silverblatt, Senior Index Analyst at S&P Indices. "At this point, companies are continuing to use buybacks to control employee options as well as shares used for dividend reinvestment programs. Few companies are venturing outside of the box to purchase additional shares, as was the common practice in late 2005 through mid-2007."

Silverblatt also determined that over the past four quarters, the number of companies taking part in stock buyback programs has slowly increased. According to S&P Indices' data, 305 S&P 500 companies purchased their shares in the first quarter of 2011, compared to 270 during the fourth quarter of 2010, 261 in the third quarter, 257 in the second quarter, and 251 in the first quarter. Over the past year, 354 S&P 500 companies have spent US$ 333 billion on buybacks with 219 issues spending more on buybacks than on dividends, of which 57 didn't pay cash dividends.

On a sector basis, Silverblatt notes that the Information Technology sector continues to dominate the buyback market. For the first quarter of 2011, Information Technology issues accounted for 23.4% of all buybacks, up slightly from the 22.3% that participated during the fourth quarter of 2010. Consumer Discretionary posted the largest increase in buyback percentages, increasing 33.7% over the fourth quarter of 2010.

Exxon Mobil maintained its top position amongst all companies implementing their buyback program, spending $5.7 billion on share repurchases during the first quarter, compared to $5.8 billion during the fourth quarter of 2010. Trailing closely behind was International Business Machines with $4.0 billion, Intel Corporation with $4.0 billion, Hewlett-Packard Company with $2.7 billion, and Wal-Mart Stores with $2.1 billion.

For the second quarter of 2011, Silverblatt expects moderate growth for buybacks aided by a slightly higher average price.

Historical S&P 500 buyback data can be found at: www.marketattributes.standardandpoors.com.

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SOURCE Standard & Poor's