S&P 500 buybacks decline significantly in Q2 2019; expenditures still remain higher than the pre-2018 levels

Date : 09/16/2019 @ 4:30PM
Source : PR Newswire (US)
Stock : Johnson and Johnson (JNJ)
Quote : 130.72  -0.61 (-0.46%) @ 10:50PM

S&P 500 buybacks decline significantly in Q2 2019; expenditures still remain higher than the pre-2018 levels

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NEW YORK, Sept. 16, 2019 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI") announced today that preliminary Q2 2019 S&P 500® stock buybacks, or share repurchases, were $164.5 billion. This was the second consecutive quarterly decline after four consecutive quarters of record buybacks. Q2 2019 buybacks were 20.1% lower than Q1 2019's $205.6 billion, 13.7% lower year-over-year from Q2 2018's $190.6 billion, and 26.2% lower than the Q4 2018 record expenditure of $223.0 billion.  

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

Key Takeaways:

  • While companies significantly reduced their Q2 2019 buyback expenditures from the record setting quarters of 2018, levels remain higher than 2017 and prior periods.
    • The 2018 tax rate decline may have pushed companies to overspend on buybacks, posting a 55% gain over 2017 and a 39% gain over the prior record in 2015.
  • The cumulative rolling four quarters of repurchases continued to impact EPS as 24.2% of the issues reduced share counts by at least 4% year-over-year, slightly down from the Q1 2019 24.9% rate, and substantially up from the Q2 2018's 15.6%, giving 1-in-4 issues at least a 4% EPS tailwind.
  • S&P 500 Q2 2019 dividends totaled $118.7 billion, up 6.3% from the Q2 2018 of $111.6 billion; Q3 2019 is set to post a new record, in the $122 billion range.
  • Total shareholder return of buybacks and dividends for the quarter came in at $283.2 billion, down 12.4% from the Q1 2019 period expenditure of $323.1 billion and down 6.3% from the $302.2 billion reported for Q2 2018.
  • Total shareholder return for the 12-month period ending June 2019 declined to $1.269 trillion, from the record 12-month March 2019 level of $1.288 trillion, and was up 17.3% from the year-over-year 12-month Q2 2018 of $1.081 trillion.

"In what may have been a reaction to their tax-inspired record-setting buying spree of 2018, companies significantly pulled back on their Q2 2019 buybacks, said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.  "While the decline is significant compared to 2018, it remains higher than the pre-2018 levels. Estimates vary, but a base amount of $170 billion a quarter has been emerging as the consensus level of buybacks going forward."

Silverblatt also found that buybacks continue to be top heavy, with the top 20 issues accounting for 51.4% of the buybacks, up a tick from the Q1 2019 51.2%, as the 10-year average is 44.1%. 

Q2 2019 GICS® Sector Analysis:

Information Technology buybacks continued to dominate, even as they decreased 20.3% to $54.2 billion compared to $68.0 billion for Q1 2019. Twelve-month expenditures were up 33.8% to $265.8 billion from $198.7 billion spent for the same period in 2018. The sector represents 33.0% of the index's buybacks for the quarter, flat from last quarter.

Materials buyback declined 49.3% to $2.4 billion compared to $4.8 billion for Q1 2018. Utilities declined 40.4%, to 0.9 billion from 1.5 billion in Q1 2019.

Health Care buybacks continued to be volatile, as they decreased 44.5% to $17.1 billion, down from $30.7 billion for Q1 2019, as the 12-months ending in Q2 2019, buybacks were $93.6 billion, up 6.1% from the $88.2 billion spent in the corresponding 2018 period. 

Issues:

The five issues with the highest total buybacks for Q2 2019 are:

  • Apple (AAPL) again led in buybacks spending $18.2 billion in Q2 2018, ranking 6th in S&P 500 history, as the level was down 23.8% from the record $23.8 billion spent in Q1 2019. Over the past 12-months, Apple has spent $71.4 billion on buybacks, almost twice the value of Ford Motor Company, up from $63.9 billion in the prior 12-month period.
  • Bank of America (BAC): $6.5 billion for Q2 2019, up from $6.3 billion for Q1 2019; in the last 12-months they spent $23.0 billion, up from $17.7 billion.
  • Oracle (ORCL): $6.3 billion for Q2 2019, down up from their $10.0 billion Q1 2019 expenditure; in the last 12 months they spent $36.6 billion, up from $11.9 billion.
  • JP Morgan (JPM): $5.2 billion for Q2 2019, up from the $5.1 billion spent in Q1 2019; in the last 12-months they spent $20.6 billion, up from $19.2 billion.
  • Cisco Systems (CSCO): $4.9 billion for Q2 2019, down from $6.1 billion for Q1 2019; in the last 12-months they spent $21.6 billion, up from $18.3 billion.

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 and estimates in bold)






PERIOD

MARKET

OPERATING

AS REPORTED





DIVIDEND &


VALUE

EARNINGS

EARNINGS

DIVIDENDS

BUYBACKS

DIVIDEND 

BUYBACK 

BUYBACK 


$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

YIELD

YIELD

YIELD

12 Mo Jun,'19 Prelim.

$24,423.49

$1,295.01

$1,132.67

$471.54

$797.03

1.93%

3.26%

5.19%

12 Mo Jun,'18

$23,036.32

$1,196.08

$1,043.63

$435.69

$645.81

1.89%

2.80%

4.69%

2018

$21,026.90

$1,281.66

$1,119.43

$456.31

$806.41

2.17%

3.84%

6.01%

2017

$22,821.24

$1,066.00

$940.86

$419.77

$519.40

1.84%

2.28%

4.12%

2016

$19,267.93

$919.85

$818.55

$397.21

$536.38

2.06%

2.78%

4.85%










6/28/2019 Prelim

$24,423

$335.58

$291.25

$118.68

$164.48

1.93%

3.26%

5.19%

3/29/2019

$23,619

$316.48

$291.23

$117.33

$205.81

1.97%

3.49%

5.45%

12/31/2018

$21,027

$293.82

$242.91

$119.81

$222.98

2.17%

3.84%

6.01%

9/30/2018

$24,579

$349.04

$306.70

$115.72

$203.76

1.81%

2.93%

4.75%

6/30/2018

$23,036

$327.53

$288.55

$111.60

$190.62

1.89%

2.80%

4.69%

3/29/2018

$22,496

$311.26

$281.28

$109.18

$189.05

1.90%

2.56%

4.46%

12/29/2017

$22,821

$288.93

$230.12

$109.46

$136.97

1.84%

2.28%

4.12%

9/29/2017

$21,579

$268.35

$243.68

$105.45

$129.17

1.92%

2.40%

4.32%

6/30/2017

$20,762

$261.39

$231.40

$104.01

$120.11

1.96%

2.41%

4.37%

3/31/2017

$20,276

$247.32

$235.65

$100.86

$133.15

1.98%

2.51%

4.49%

12/31/2016

$19,268

$240.11

$207.93

$103.82

$135.29

2.06%

2.78%

4.85%

9/30/2016

$18,742

$247.98

$219.46

$98.43

$112.20

2.10%

2.92%

5.01%

6/30/2016

$18,193

$222.77

$201.79

$98.30

$127.50

2.14%

3.22%

5.36%

3/31/2016

$17,958

$208.99

$189.37

$96.67

$161.39

2.15%

3.28%

5.43%

12/31/2015

$17,900

$201.95

$163.76

$99.39

$145.88

2.14%

3.20%

5.33%

9/30/2015

$16,917

$224.14

$204.58

$95.07

$150.58

2.22%

3.30%

5.52%

6/30/2015

$18,219

$230.84

$201.35

$94.45

$131.56

2.03%

3.04%

5.07%

 

S&P Dow Jones Indices








S&P 500 SECTOR BUYBACKS








SECTOR $ MILLIONS

Q2,'18

Q1,'19

Q2,'18

12MoJun,'19

12MoJun,'18

5-YEARS

10-YEARS









Consumer Discretionary

$15,764

$17,721

$22,656

$78,825

$86,352

$429,464

$728,807

Consumer Staples

$7,114

$9,786

$6,580

$36,512

$39,904

$211,298

$439,981

Energy

$4,552

$4,294

$4,285

$24,874

$21,922

$92,142

$263,972

Financials

$37,819

$42,845

$29,968

$166,948

$131,925

$593,911

$813,978

Healthcare

$17,066

$30,749

$27,241

$93,633

$88,210

$408,431

$686,549

Industrials

$16,967

$19,426

$23,426

$74,578

$64,702

$356,504

$543,959

Information Technology

$54,210

$67,986

$71,511

$265,787

$198,677

$864,307

$1,333,335

Materials

$2,420

$4,771

$3,237

$16,062

$8,998

$67,230

$108,265

Real Estate

$555

$409

$884

$2,963

$3,888

$9,334

$9,334

Communication Services

$7,132

$6,345

$419

$33,125

$601

$41,328

$72,197

Utilities

$882

$1,479

$413

$3,720

$631

$8,517

$18,596

TOTAL

$164,481

$205,811

$190,621

$797,028

$645,811

$3,082,465

$5,018,974

 

S&P Dow Jones Indices









S&P 500 20 LARGEST Q2 2019 BUYBACKS, $ MILLIONS 







Company  

Ticker

Sector

Q2 2019

12-Months

12-Months

5-Year

10-Year

Indicated




Buybacks

Jun,'19

Jun,'18

Buybacks

Buybacks

Dividend




$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

Apple

AAPL

Information Technology

$18,154

$71,443

$63,924

$247,481

$302,414

$14,917

Bank of America

BAC

Financials

$6,507

$23,041

$17,673

$53,164

$58,059

$7,361

Oracle 

ORCL

Information Technology

$6,301

$36,643

$11,853

$70,970

$99,812

$4,621

JPMorgan 

JPM

Financials

$5,210

$20,645

$19,210

$63,391

$83,456

$11,678

Cisco Systems

CSCO

Information Technology

$4,936

$21,579

$18,250

$53,425

$85,891

$5,993

Wells Fargo 

WFC

Financials

$4,906

$24,691

$11,734

$63,997

$79,914

$10,187

Microsoft 

MSFT

Information Technology

$4,633

$19,543

$10,721

$72,464

$112,993

$14,100

Johnson Controls Internat'l

JCI

Industrials

$4,125

$5,154

$484

$8,011

$9,537

$828

Alphabet 

GOOGL

Communication Services

$3,577

$11,452

$6,326

$25,996

$26,914

$0

Citigroup

C

Financials

$3,464

$13,043

$16,071

$49,206

$52,920

$4,717

Intel 

INTC

Information Technology

$3,049

$10,037

$6,920

$34,109

$62,342

$5,641

Booking Holdings

BKNG

Consumer Discretionary

$2,718

$9,557

$3,178

$18,043

$19,578

$0

Johnson & Johnson 

JNJ

Health Care

$2,486

$8,971

$2,715

$36,423

$58,932

$10,089

Amgen

AMGN

Health Care

$2,415

$9,426

$15,730

$32,349

$51,126

$3,538

Biogen 

BIIB

Health Care

$2,402

$4,410

$3,000

$15,325

$20,316

$0

Visa

V

Information Technology

$2,152

$8,178

$7,418

$31,863

$44,473

$1,739

Lowe's Companies

LOW

Consumer Discretionary

$1,944

$3,961

$2,535

$18,373

$34,586

$1,722

Mastercard 

MA

Information Technology

$1,921

$5,920

$4,824

$20,322

$28,488

$1,498

Honeywell Internat'l

HON

Industrials

$1,900

$4,946

$3,601

$13,875

$16,396

$2,387

Walgreens Boots Alliance

FB

Communication Services

$1,752

$12,083

$10,230

$24,262

$28,017

$0

Top 20   



$84,552

$324,723

$236,397

$953,050

$1,276,164

$101,017

S&P 500



$164,481

$797,028

$645,811

$3,082,465

$5,073,953

$530,924

Top 20 % of S&P 500



51.40%

40.74%

36.60%

30.92%

25.15%

19.03%

   Gross values are not adjusted for float







 

S&P Dow Jones Indices




S&P 500 20 Largest Quarterly Buybacks, $ Millions, as of Q2 2019;  Apple added at #6

$ MILLIONS

QUARTER

COMPANY

SECTOR


$23,811

Q1 2019

Apple

Information Technology

1

$22,908

Q1 2018

Apple

Information Technology

2

$21,860

Q2 2018

Apple

Information Technology

3

$21,162

Q2 2006

QUALCOMM

Information Technology

4

$19,364

Q3 2018

Apple

Information Technology

5

$18,154

Q2 2019

Apple

Information Technology

6

$18,036

Q1 2014

Apple

Information Technology

7

$17,319

Q3 2014

Apple

Information Technology

8

$16,413

Q2 2013

Apple

Information Technology

9

$15,707

Q3 2007

International Business Machines 

Information Technology

10

$13,420

Q3 2015

Apple

Information Technology

11

$12,852

Q4 2013

Johnson & Johnson 

Healthcare

12

$12,318

Q4 2016

Allergan plc (AGN)

Healthcare

13

$12,183

Q2 2012

Johnson & Johnson 

Healthcare

14

$11,480

Q4 2016

Apple

Information Technology

15

$11,133

Q4 2017

Apple

Information Technology

16

$10,776

Q2 2016

Apple

Information Technology

17

$10,724

Q2 2015

Apple

Information Technology

18

$10,723

Q1 2016

Home Depot

Consumer Discretionary

19

$10,697

Q1 2018

Amgen 

Healthcare

20

 

S&P Dow Jones Indices





S&P 500 Q2 2019 Buyback Report









SECTOR

DIVIDEND

BUYBACK 

COMBINED



YIELD

YIELD

YIELD


Consumer Discretionary

1.43%

3.12%

4.54%


Consumer Staples

3.74%

1.97%

5.71%


Energy

4.03%

2.11%

6.15%


Financials

2.53%

5.04%

7.58%


HealthCare

1.87%

2.77%

4.64%


Industrials

2.10%

3.22%

5.32%


Information Technology

1.52%

4.90%

6.42%


Materials

2.35%

2.46%

4.82%


Real Estate

3.17%

0.38%

3.55%


Communications Services

1.60%

1.50%

3.10%


Utilities

3.18%

0.44%

3.62%


S&P 500

2.18%

3.25%

5.43%


   Uses full values (unadjusted for float)




   Dividends based on indicated; buybacks based on the last 12-months ending Q2,'19

 

Share Count Reduction (SCR)

SCR 

SCR

(Y/Y diluted shares used for EPS)

>=4%

<=-4%

Q2 2019

8.00%

24.20%

Q1 2019

8.03%

24.90%

Q4 2018

8.45%

18.71%

Q3 2018

6.43%

17.67%

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%

 

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.  

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SOURCE S&P Dow Jones Indices

Copyright 2019 PR Newswire

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