S&P 500 Stock Buybacks Up 117% in 2010; Share Repurchases Increase for the 6th Quarter in a Row

Record Year-Over-Year Percentage and Dollar Increase for Stock Buybacks

Mar 23, 2011, 09:16 ET from Standard & Poor's

NEW YORK, March 23, 2011 /PRNewswire/ -- Standard & Poor's, the world's leading index provider, announced today that preliminary results show that S&P 500 stock buybacks for the fourth quarter of 2010 increased 80.6% to $86.4 billion from the $47.8 billion registered during the fourth quarter of 2009. The $86.4 billion in share repurchases also represents a modest 8.6% increase over the third quarter of 2010 ($79.6 billion), and marks the sixth quarter in a row that S&P 500 companies have increased their stock buyback activity.

"Approximately, $299 billion was spent by S&P 500 companies on share repurchases last year which represents a whopping 117% increase over the $138 billion spent in 2009," says Howard Silverblatt, Senior Index Analyst at S&P Indices. "At this point the practice is not as deep as it was in the heydays of 2006-7, but companies are certainly back in the buyback business. While 2010 expenditures are still just half of what was seen in 2007, last year's activity resulted in a record year-over-year percentage and dollar increase for stock buybacks."

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 data, 270 S&P 500 companies purchased their shares during the fourth quarter of 2010 compared to 261 in the third quarter, 257 in the second quarter, and 251 in the first quarter.

On a sector basis, Silverblatt notes that the Information Technology sector continues to dominate the buyback market, though at a much smaller percentage than years past. For the fourth quarter of 2010, Information Technology issues accounted for 22.3% of all buybacks, down from 28.6% registered during the third quarter. Information Technology was also the only sector to reduce share count for the year, aiding EPS growth. Energy significantly rebounded in the 4th quarter, with 11.5% of Energy issues repurchasing their shares versus just 6.4% during the 3rd quarter.

Exxon Mobil returned to the top of the buyback expenditure list, spending $5.8 billion during the fourth quarter of 2010. Trailing closely behind was Microsoft Corporation (+$5.1 billion), Wal-Mart Stores (+$3.8 billion) and International Business Machines (+$3.6 billion). For all of 2010, International Business Machines led with $15.4 billion in stock buybacks followed by Microsoft (+$15.3 billion), Wal-Mart (+$14.8 billion) and Exxon Mobil (+$13.1 billion).

For the first quarter of 2011, Silverblatt expects that companies will continue to be cautious and purchase slightly more shares than needed to satisfy employee stock option requirements, enhancing 1st quarter earnings. For the remainder of 2011, Silverblatt expects buybacks to increase at a moderate pace. "However, if investors begin to push companies to use their vast cash reserves to support stock prices and drive up their earnings, we could see significant buyback figures."

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

12/31/2010

$11,430

$199.22

$187.77

$54.85

$86.36

4.42%

09/30/2010

$10,336

$195.28

$176.80

$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

$175.00

$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%

06/30/2008

$11,163

$148.43

$112.15

$61.94

$87.91

6.88%

03/30/2008

$11,511

$144.63

$135.24

$61.72

$113.90

7.25%

12/31/2007

$12,868

$133.38

$68.53

$67.09

$141.71

6.49%

09/30/2007

$13,470

$184.13

$133.66

$61.21

$171.95

5.89%

06/30/2007

$13,350

$213.65

$194.30

$59.76

$157.76

5.44%

03/31/2007

$12,706

$200.23

$190.75

$58.53

$117.70

5.35%

12/31/2006

$12,729

$197.35

$181.65

$61.79

$105.18

5.16%



S&P Indices




S&P 500 20 LARGEST Q4 2010 BUYBACKS, $ MILLIONS



Company

SECTOR

Q4 2010

BUYBACKS




Q4,'04-Q4,'10

Exxon Mobil Corp

Energy

$5,758

$151,847

Microsoft Corp

Information Technology

$5,052

$97,090

Wal-Mart Stores

Consumer Staples

$3,800

$35,003

International Business Machines

Information Technology

$3,601

$68,984

The Coca-Cola Co

Consumer Staples

$2,958

$12,134

ConocoPhillips

Energy

$2,608

$21,968

Hewlett-Packard Co

Information Technology

$2,290

$50,272

Cisco Systems

Information Technology

$1,849

$49,676

The Travelers Co

Financials

$1,557

$14,637

DIRECTV  

Consumer Discretionary

$1,550

$13,003

Intel Corp

Information Technology

$1,514

$30,711

General Electric  

Industrials

$1,354

$38,024

Johnson & Johnson  

Healthcare

$1,285

$26,023

Amgen Inc

Healthcare

$1,192

$21,816

Philip Morris International

Consumer Staples

$1,167

$15,911

The Goldman Sachs Group

Financials

$1,095

$30,640

WellPoint Inc

Healthcare

$1,015

$21,311

Lowe's Companies Inc

Consumer Discretionary

$1,002

$7,916

Kohl's Corp

Consumer Discretionary

$1,000

$3,644

MedcoHealth Solutions Inc

Healthcare

$963

$11,066

Top 20


$42,611

$721,677

S&P 500


$86,364

$2,212,696

Top 20 % of S&P 500


49.34%

32.62%



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.    

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SOURCE Standard & Poor's



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