S&P 500 Q2 2018 Buybacks Increase 58.7% Year-Over-Year to Record $190.6 Billion

Date : 09/24/2018 @ 10:01AM
Source : PR Newswire (US)
Stock : Union Pacific Corp. (UNP)
Quote : 148.76  0.24 (0.16%) @ 1:30PM

S&P 500 Q2 2018 Buybacks Increase 58.7% Year-Over-Year to Record $190.6 Billion

Union Pacific (NYSE:UNP)
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1 Month : From Sep 2018 to Oct 2018

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NEW YORK, Sept. 24, 2018 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI") today announced preliminary results indicating that S&P 500® stock buybacks, or share repurchases, totaled $190.6 billion for Q2 2018, displacing the prior quarterly record of $189.1 billion, set during Q1 2018. This is a 58.7% increase from the $120.1 billion reported for Q2 2017. For the first half of 2018, buybacks are up 49.9% to $379.7 billion from the prior year's $253.3 billion.

For the 12-month period ending June 2018, S&P 500 issues spent a record $645.8 billion on buybacks, up 29.0% from $500.8 billion for the corresponding 2017 period. This is 9.6% higher than the prior record of $589.4 billion, set during the 12-month period ending March 2016.

Historical data on S&P 500 buybacks is available at www.spdji.com/indices/equity/sp-500. 

Key Takeaways:

  • The number of issues with substantially reduced share counts of at least 4.0% year-over-year rebounded to 15.4%, from the prior quarter's 13.5%. This is the highest since the 19.4% posted in Q4 2016.
  • For Q2 2018, 79 issues experienced substantially reduced share counts, up from 65 for Q1 2018 and 70 for both Q4 2017 and Q3 2017, with Q2 2017 posting 66.
  • Total shareholder return for the quarter set a record of $302.2 billion, up 34.9% from the $224.1 billion reported for Q2 2017.
  • S&P 500 dividends totaled $111.6 billion, a new record, up 7.3% from the $104.0 billion of Q1 2018.
  • Total shareholder return of buybacks and dividends for the 12-month period ending June 2018 set a record at $1.081 trillion, surpassing the Q1's record $1.003 trillion, and up 19.1% from $907.9 billion for the corresponding 2017 period.
  • 305 S&P 500 issues reduced their share count during Q2 2018, compared to 250 during Q1 2018 and 268 during Q2 2017.

"The Q1 2018 buyback level was remarkable and the new Q2 2018 record continued to exceed expectations," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.  "Given the record earnings, strong cash-flow, investor demand and corporate statements, the indications are that the high level will continue for the rest of the year."

"The buying continued to be top heavy, with the top 20 issues accounting for 49.7% of all S&P 500 buybacks (the 5-year average is 41.7%), a level not seen since Q3 2012, when it was at 53.4%."

"More index issues experienced a significant EPS tailwind, as share count reductions of at least 4.0% increased for the quarter, as the number of issues increasing their shares dropped. Further, based on the current Q2 2018 actual shares and the historical Q3 2017 shares, absent a dramatic pullback in buybacks or increase in issuance, 11% of the S&P 500 issues already have a substantial tailwind built into their Q3 2018 EPS, which currently is estimated to set another record."

Q2 2018 GICS® Sector Analysis:

Telecommunications Services buybacks jumped 146% ahead of the sector's reorganization (September 2018), but remains only 0.22% of all S&P 500 buybacks and is 89.1% lower than it was five years ago (Q2 2013).

Information Technology expenditures increased 12.8%, after Q1's 77.1% gain, to $71.5 billion – compared to $63.4 billion for Q1 2018 and $27.6 billion for Q2 2017. The sector represents 37.5% of the index's buybacks, up from 23.0% for Q2 2017.

Health Care expenditures, which were up 125.3%, declined 23.5% to $27.2 billion compared to $35.6 billion for Q1 2018; and was 116% more than the $12.6 billion expenditure from Q2 2017.

Consumer sectors split, as Consumer Discretionary buybacks increased 21.3% to $22.7 billion, up from $18.7 billion for Q1 2018. Consumer Staples declined 9.3% to $6.6 billion, down from $7.3 billion for Q1 2018.

Issues:

The five issues with the highest total buybacks for Q2 2018 are:

  • Apple (AAPL) again led in buybacks, spending $21.9 billion in Q2 2018, down from the record $22.8 billion spent for Q1 2018, as the quarter ranked second highest historically; Apple holds the top six positions for buybacks historically. Apple accounted for 30.6% of the IT sector's buybacks and 11.5% of all S&P 500 buybacks for Q2 2018.
  • AbbVie (ABBV): $7.5 billion for Q2 2018, up from $1.4 billion for Q1 2018 and a minor $5 million for Q2 2017. AbbVie was 27.6% of all S&P 500 Health Care sector buybacks for Q2 2018.
  • Cisco Systems (CSCO): $6.1 billion for Q2 2018, down from $6.2 billion for Q4 2017 and up from $1.3 billion for Q2 2017.
  • Union Pacific (UNP): $5.5 billion for Q2 2018, up from $1.2 billion for Q1 2018 and $0.9 billion for Q2 2017.
  • Broadcom (AVGO): $5.4 billion for Q2 2018, up from $0.3 billion for Q1 2018 and none for Q2 2017.

Total Shareholder Return:

Silverblatt determined that total shareholder return, through regular cash dividends and buybacks, increased 1.3% to the first $300 billion quarterly posting, at $302.2 billion, up from $298.2 billion for Q1 2018 and up 34.9% from the $224.1 billion for Q2 2017.

For the 12-month period ending June 2018, shareholder return totaled $1.081 trillion, up 19.1% from $907.9 billion for the 12-month period ending June 2017.

S&P 500 dividends posted a new record payment for Q2 2018, at $111.6 billion, and was up 7.3% from its $104.0 billion Q2 2017. Dividend payments totaled a record $435.7 billion for the 12-month period ending June 2018, up 7.0% from $407.1 billion for the 12-month period ending June 2017.

"For the second half of 2018, indications are strong for increased corporate expenditures in both buybacks and dividends, with annual records for both," said Silverblatt.

"Buybacks appear to be on a roll, supporting stock price via more purchases and increasing EPS through lower share counts.

"One strong takeaway are the trend in dividends where more issues continue to increase with greater average size increases. Dividends are a pure cash-flow item, so when they are increased, companies are usually very confident of their future earnings flow," states Silverblatt.

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 in bold)







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

12 Months Jun 2018

$23,036

$1,196.67

$1,043.55

$435.69

$645.81

1.89%

2.80%

4.69%

$1,081.50

12 Months Jun 2017

$20,762

$996.81

$894.44

$407.11

$500.75

1.96%

2.41%

4.37%

$907.87











2017

$22,821

$1,066.00

$940.86

$419.77

$519.40

1.84%

2.28%

4.12%

$939.17

2016

$19,268

$919.85

$818.55

$397.21

$536.38

2.06%

2.78%

4.85%

$933.60

2015

$17,900

$885.38

$762.74

$382.32

$572.16

2.14%

3.20%

5.33%

$954.47











6/30/2018 Prelim.

$23,036

$328.13

$288.47

$111.60

$190.62

1.89%

2.80%

4.69%

$302.22

3/29/2018

$22,496

$311.26

$281.28

$109.18

$189.05

1.90%

2.56%

4.46%

$298.23

12/29/2017

$22,821

$288.93

$230.12

$109.46

$136.97

1.84%

2.28%

4.12%

$246.43

9/29/2017

$21,579

$268.35

$243.68

$105.45

$129.17

1.92%

2.40%

4.32%

$234.61

6/30/2017

$20,762

$261.39

$231.40

$104.01

$120.11

1.96%

2.41%

4.37%

$224.12

3/31/2017

$20,276

$247.32

$235.65

$100.86

$133.15

1.98%

2.51%

4.49%

$234.01

12/31/2016

$19,268

$240.11

$207.93

$103.82

$135.29

2.06%

2.78%

4.85%

$239.11

9/30/2016

$18,742

$247.98

$219.46

$98.43

$112.20

2.10%

2.92%

5.01%

$210.63

6/30/2016

$18,193

$222.77

$201.79

$98.30

$127.50

2.14%

3.22%

5.36%

$225.81

3/31/2016

$17,958

$208.99

$189.37

$96.67

$161.39

2.15%

3.28%

5.43%

$258.05

12/31/2015

$17,900

$201.95

$163.76

$99.39

$145.88

2.14%

3.20%

5.33%

$245.27

9/30/2015

$16,917

$224.14

$204.58

$95.07

$150.58

2.22%

3.30%

5.52%

$245.66

6/30/2015

$18,219

$230.84

$201.35

$94.45

$131.56

2.03%

3.04%

5.07%

$226.01

3/31/2015

$18,303

$228.45

$193.05

$93.41

$144.13

1.98%

2.94%

4.92%

$237.54

12/30/2014

$18,245

$237.14

$202.31

$92.80

$132.63

1.92%

3.03%

4.95%

$225.43

9/30/2014

$17,519

$262.92

$244.00

$89.02

$145.19

1.96%

3.14%

5.10%

$234.22

6/30/2014

$17,404

$260.50

$240.96

$86.65

$116.17

1.91%

3.06%

4.98%

$202.82

3/31/2014

$16,700

$243.67

$221.82

$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

 

S&P Dow Jones Indices







S&P 500 SECTOR BUYBACKS







SECTOR $ MILLIONS

Q2,'18

Q1,'18

Q2,'17

12MoJun','18

12MoJun','17

5-YEARS








Consumer Discretionary

$22,656

$18,679

$22,357

$86,352

$81,126

$429,261

Consumer Staples

$6,580

$7,257

$10,296

$39,904

$44,776

$217,688

Energy

$4,285

$10,115

$3,107

$21,922

$7,538

$113,292

Financials

$29,968

$33,802

$26,815

$131,925

$108,297

$494,379

Healthcare

$27,241

$35,632

$12,636

$88,210

$81,633

$376,147

Industrials

$23,426

$16,628

$14,799

$64,702

$56,952

$347,013

Information Technology

$71,511

$63,424

$27,628

$198,677

$109,815

$744,913

Materials

$3,237

$2,283

$1,020

$8,998

$7,104

$69,281

Real Estate

$884

$883

$1,150

$3,888

$2,483

$6,371

Telecommunication Services

$419

$170

$282

$601

$789

$14,622

Utilities

$413

$179

$20

$631

$243

$5,487

TOTAL

$190,621

$189,051

$120,109

$645,811

$500,754

$2,818,454

 

S&P Dow Jones Indices








S&P 500 20 LARGEST Q1 2018 BUYBACKS, $ MILLIONS 






Company  

Ticker

Sector

Q2,'18

12MO Jun,'18

12MO Jun,'17

5-Year

10-year

Indicated




Buybacks

Buybacks

Buybacks

Buybacks

Buybacks

Dividend




$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

Apple

AAPL

Information Technology

$21,860

$63,924

$32,986

$208,629

$226,579

$14,352

AbbVie 

ABBV

Healthcare

$7,516

$9,457

$2,716

$24,830

$24,951

$5,819

Cisco Systems

CSCO

Information Technology

$6,147

$18,250

$4,304

$41,689

$67,923

$6,208

Union Pacific

UNP

Industrials

$5,527

$9,095

$3,464

$21,886

$27,559

$2,482

Broadcom 

AVGO

Information Technology

$5,378

$5,725

$0

$5,770

$6,042

$3,022

JPMorgan

JPM

Financials

$4,968

$19,210

$10,385

$45,546

$62,811

$7,627

Bank of America 

BAC

Financials

$4,965

$17,673

$7,693

$34,015

$35,018

$6,084

Oracle 

ORCL

Information Technology

$4,965

$11,853

$3,844

$44,140

$67,141

$3,103

Intel 

INTC

Information Technology

$4,358

$7,385

$3,518

$28,546

$54,967

$5,592

Celgene 

CELG

Healthcare

$3,396

$9,118

$1,265

$19,218

$25,721

$0

Facebook

FB

Information Technology

$3,349

$6,721

$378

$7,099

$7,100

$0

Amgen 

AMGN

Healthcare

$3,244

$15,539

$3,309

$22,071

$43,564

$3,516

Boeing

BA

Industrials

$2,965

$10,201

$6,500

$36,755

$37,678

$3,985

Wells Fargo

WFC

Financials

$2,927

$11,734

$8,724

$46,803

$56,389

$8,381

Biogen

BIIB

Healthcare

$2,750

$3,000

$2,365

$11,612

$16,143

$0

Microsoft 

MSFT

Information Technology

$2,362

$10,721

$11,788

$60,237

$102,803

$12,908

Citigroup 

C

Financials

$2,308

$16,071

$10,696

$37,992

$40,388

$4,590

Alphabet 

GOOG

Information Technology

$2,052

$6,326

$2,745

$14,544

$15,462

$0

Home Depot

HD

Consumer Discretionary

$2,000

$7,200

$8,360

$36,201

$50,777

$4,753

Visa

V

Information Technology

$1,756

$7,418

$6,933

$28,443

$38,941

$1,500

Top 20   



$94,793

$266,621

$131,973

$776,025

$1,007,957

$93,921

S&P 500



$190,621

$645,811

$500,754

$2,818,454

$4,414,753

$475,404

Top 20 % of S&P 500


49.73%

41.28%

26.35%

27.53%

22.83%

19.76%

   Gross values are not adjusted for float







 

S&P Dow Jones Indices



S&P 500 20 Largest Quarterly Buybacks, $ Millions, as of Q2 2018, 1 added


$ MILLIONS

QUARTER

COMPANY

SECTOR


$22,756

Q1 2018

Apple

Information Technology

1

$21,860

Q2 2018

Apple

Information Technology

2

$20,783

Q2 2018

Apple

Information Technology

3

$17,971

Q1 2014

Apple

Information Technology

4

$17,000

Q3 2014

Apple

Information Technology

5

$16,000

Q2 2013

Apple

Information Technology

6

$15,707

Q2 2007

International Business Machines 

Information Technology

7

$13,253

Q3 2015

Apple

Information Technology

8

$12,852

Q2 2012

Johnson & Johnson 

Healthcare

9

$12,318

Q4 2016

Allergan plc (AGN)

Healthcare

10

$12,183

Q3 2012

Johnson & Johnson 

Healthcare

11

$10,851

Q4 2016

Apple

Information Technology

12

$10,723

Q3 2007

Home Depot

Consumer Discretionary

13

$10,697

Q1 2018

Amgen 

Healthcare

14

$10,166

Q2 2016

Apple

Information Technology

15

$10,095

Q4 2017

Apple

Information Technology

16

$10,000

Q2 2015

Apple

Information Technology

17

$9,859

Q4 2007

Transocean

Energy

18

$9,179

Q4 2006

Exxon Mobil 

Energy

19

$9,465

Q1 2008

Exxon Mobil 

Energy

20

$273,718


TOP 20



 

S&P Dow Jones Indices





S&P 500 Q2 2018 Buyback Report









SECTOR

DIVIDEND

BUYBACK 

COMBINED



YIELD

YIELD

YIELD


Consumer Discretionary

1.28%

2.79%

4.08%


Consumer Staples

3.44%

2.42%

5.87%


Energy

2.98%

1.58%

4.56%


Financials

1.99%

3.94%

5.93%


HealthCare

1.64%

2.47%

4.11%


Industrials

1.98%

2.69%

4.67%


Information Technology

1.27%

3.37%

4.64%


Materials

2.08%

1.62%

3.70%


Real Estate

3.45%

0.56%

4.01%


Telecommunication Services

5.58%

0.13%

5.71%


Utilities

3.41%

0.09%

3.51%


S&P 500

1.98%

2.72%

4.70%


   Uses full values (unadjusted for float)




   Dividends based on indicated; buybacks based on the last 12-months ending Q2,'18

 

Share Count Reduction (SCR)

SCR 

SCR

(Y/Y diluted shares used for EPS)

>=4%

<=-4%

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%

Q1 2015

7.62%

21.04%

Q4 2014

6.04%

21.33%

 

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.

Cision View original content:http://www.prnewswire.com/news-releases/sp-500-q2-2018-buybacks-increase-58-7-year-over-year-to-record-190-6-billion-300717532.html

SOURCE S&P Dow Jones Indices

Copyright 2018 PR Newswire

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