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SYS-CON MEDIA Authors: Liz McMillan, Esmeralda Swartz, Hovhannes Avoyan, Elizabeth White, Adrian Bridgwater

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S&P 500 Stock Buybacks Up 19% in 2013

Fourth quarter up 1% over the third quarter

NEW YORK, March 26, 2014 /PRNewswire/ -- S&P Dow Jones Indices announced today that preliminary results show that S&P 500® stock buybacks, or share repurchases, increased 1.0% to $129.4 billion during the fourth quarter of 2013, up from the $128.2 billion spent on share repurchases during the third quarter of 2013.  For fiscal year 2013, S&P 500 issues increased their buyback expenditures by 19.2% to $475.6 billion from the $398.9 billion posted in 2012. The high mark was reached in 2007, when companies spent $589.1 billion. The recession low point was $137.6 billion, recorded in 2009. 

"Although there are headlines of record setting buybacks programs, the 19.2% increase in buyback expenditures for 2013 only matched the 19.2% average daily stock price increase," says Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "The average stock price for Q1 2014 is running 21.0% higher than Q1 2013, meaning that a 21% increase in current expenditures is necessary to purchase the same number of shares as last year."

S&P Dow Jones Indices' data show that 276 issues reduced, and 185 increased, their diluted share count in Q4 versus 263 decreases and 188 increases in Q3. For 2013, 272 issues reduced their share count while 200 increased.

Significant changes (generally considered 1% or greater for the quarter) favored reductions as 112 issues reduced their count by at least 1% and 24 issues increased by at least 1% in Q4. For all of 2013, significant changes (of at least 4% for the year) came in at 83 decreases and 39 increases.

"It's not just what you buy, but what you issue.  And while companies (in aggregate) are not materially increasing the number of shares they are buying back, they appear to be issuing fewer shares.  The result is greater Share Count Reduction (SCR) by companies, which increases earnings-per-share and reduces P/E - and that's the market takeaway," explains Silverblatt.

Silverblatt also comments that companies continue to increase their shareholders' returns through SCR and regular cash dividends. Buyback and dividend expenditures combined reached $214.4 billion in the quarter, second only to the record fourth quarter of 2007 when $233.2 billion on SCR was spent. Of the 401 issues which reported buybacks over the past year, 339 companies paid a cash dividend, with 196 of them spending more on buybacks than dividends.

Buyback program authorizations have substantially increased in 2013, and have continued into 2014, notes Silverblatt. "Keeping up with the current bull market means that companies have to pay more for the same number of shares. The true test however is SCR, and we are seeing more companies achieve share count reduction as they increase their EPS."

On a sector basis, Information Technology maintained its dominance of buybacks, accounting for 26.7% of all buybacks in Q4 (up from 25.9% in Q3) – International Business Machines led the index with $5.8 billion in buybacks (up from $1.9 billion in Q3), followed by Apple, which spent $5 billion during the quarter (up from $4.9 in Q3).   

For the year, the top five spenders are – Apple ($25.9 billion), Exxon-Mobil ($16.0 billion), International Business Machines ($13.9 billion), AT&T ($13.0 billion) and Pfizer ($13.0 billion).

Historical S&P 500 buyback data can be found at: www.spindices.com/indices/equity/sp-500

S&P Dow Jones Indices








S&P 500, $ U.S. BILLIONS, preliminary values in bold






PERIOD

MARKET

OPERATING

AS REPORTED





DIVIDEND &


VALUE

EARNINGS

EARNINGS

DIVIDENDS

BUYBACKS

DIVIDEND 

BUYBACK 

BUYBACK 


$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

YIELD

YIELD

YIELD

12/31/2013 Prelim.

$16,495

$252.01

$236.58

$84.98

$129.41

1.89%

2.88%

4.77%

9/30/2013

$14,960

$239.50

$219.13

$79.26

$128.16

2.05%

2.98%

5.03%

6/30/2013

$14,310

$234.84

$221.56

$76.67

$118.05

2.07%

2.94%

5.02%

3/31/2013

$13,979

$229.57

$215.76

$70.86

$99.97

2.06%

2.97%

5.02%

12/31/2012

$12,742

$206.84

$184.50

$79.83

$99.15

2.20%

3.13%

5.33%

9/30/2012

$12,881

$214.58

$189.64

$69.48

$103.72

2.07%

3.01%

5.08%

6/30/2012

$12,303

$229.69

$195.27

$67.31

$111.75

2.08%

3.27%

5.35%

3/31/2012

$12,730

$219.09

$208.15

$64.07

$84.29

1.95%

3.14%

5.09%

12/31/2011

$11,385

$214.83

$186.85

$65.89

$87.59

2.11%

3.56%

5.67%

09/30/2011

$10,303

$230.30

$206.08

$59.20

$118.41

2.22%

3.92%

6.14%

6/30/2011

$12,021

$226.29

$202.44

$59.03

$109.24

1.84%

3.04%

4.88%

3/31/2011

$12,068

$205.34

$195.15

$56.08

$89.84

1.76%

2.76%

4.52%

12/31/2010

$11,430

$199.40

$187.67

$54.85

$86.36

1.80%

2.61%

4.42%

09/30/2010

$10,336

$195.28

$176.80

$51.26

$79.56

1.94%

2.52%

4.45%

06/30/2010 

$9,323

$189.04

$178.00

$50.44

$77.64

2.10%

2.31%

4.41%

03/31/2010

$10,560

$175.00

$157.85

$49.28

$55.26

1.83%

1.54%

3.36%

12/31/2009

$9,928

$152.77

$135.14

$49.04

$47.82

1.97%

1.39%

3.36%

09/30/2009

$9,337

$139.37

$130.37

$47.21

$34.85

2.24%

1.48%

3.71%

06/30/2009

$8,045

$120.85

$118.22

$47.63

$24.20

2.77%

2.40%

5.17%

03/31/2009 

$6,928

$87.78

$65.29

$51.73

$30.78

3.43%

3.70%

7.13%

12/31/2008

$7,852

-$0.78

-$202.11

$62.19

$48.12

3.15%

4.33%

7.48%

09/30/2008

$10,181

$142.90

$86.16

$61.44

$89.71

2.48%

4.26%

6.73%

06/30/2008

$11,163

$148.43

$112.15

$61.94

$87.91

2.26%

4.62%

6.88%

03/30/2008

$11,511

$144.63

$135.24

$61.72

$113.90

2.17%

5.08%

7.25%

12/31/2007

$12,868

$133.38

$68.53

$67.09

$141.71

1.92%

4.58%

6.49%

 

S&P Dow Jones Indices






S&P 500 20 LARGEST Q4 2013 BUYBACKS, $ MILLIONS 





Company

SECTOR

Q4,'13

2013

2012

5-YEARS







International Business Machines 

Information Technology

$5,797

$13,859

$11,995

$63,704

Apple 

Information Technology

$5,029

$25,939

$1,950

$27,889

Pfizer

Healthcare

$4,647

$13,027

$8,228

$28,645

Cisco Systems

Information Technology

$3,805

$8,235

$3,262

$30,620

Exxon Mobil

Energy

$3,302

$15,998

$21,068

$91,917

Oracle Corporation

Information Technology

$2,833

$10,750

$10,130

$26,458

General Electric 

Industrials

$2,820

$10,316

$5,242

$19,907

Express Scripts Holding 

Healthcare

$2,503

$4,055

$0

$7,847

Microsoft Corporation 

Information Technology

$2,113

$6,371

$5,343

$37,554

The Home Depot

Consumer Discretionary

$2,100

$8,546

$3,984

$18,706

AT&T

Telecommunication Services

$1,894

$13,028

$12,752

$25,780

Walt Disney

Consumer Discretionary

$1,718

$4,761

$3,259

$16,516

CVS Caremark 

Consumer Staples

$1,704

$3,976

$4,330

$14,836

3M 

Industrials

$1,674

$5,212

$2,204

$10,988

Seagate Technology Public 

Information Technology

$1,520

$1,846

$3,745

$7,188

 Procter & Gamble 

Consumer Staples

$1,502

$6,006

$6,244

$27,666

Philip Morris International

Consumer Staples

$1,447

$5,963

$6,525

$28,515

Goldman Sachs Group

Financials

$1,400

$6,175

$4,640

$21,048

Wells Fargo

Financials

$1,378

$5,356

$3,918

$12,001

Bank of America 

Financials

$1,351

$3,220

$0

$3,220

Top 20


$50,537

$172,639

$118,819

$521,005

S&P 500


$129,411

$475,587

$398,910

$1,716,039

Top 20 % of S&P 500


39.05%

36.30%

29.79%

30.36%

S&P Dow Jones Indices





S&P 500 SECTOR BUYBACKS





SECTOR $ MILLIONS

Q4,'13

2013

2012

5-YEARS






Consumer Discretionary

$18,080

$70,226

$65,076

$265,908

Consumer Staples

$11,309

$42,822

$47,867

$216,079

Energy

$12,236

$40,950

$35,721

$163,320

Financials

$16,077

$58,547

$52,333

$186,266

Healthcare

$14,525

$61,959

$69,581

$259,511

Industrials

$16,230

$53,735

$32,257

$156,808

Information Technology

$34,528

$121,448

$76,682

$400,136

Materials

$3,899

$10,306

$4,428

$29,129

Telecommunication Services

$2,228

$14,866

$12,829

$29,022

Utilities

$300

$728

$2,135

$9,859

TOTAL

$129,411

$475,587

$398,910

$1,716,039






SECTOR BUYBACK MAKEUP %

Q4,'13

2013

2012

5-YEARS

Consumer Discretionary

13.97%

14.77%

16.31%

15.50%

Consumer Staples

8.74%

9.00%

12.00%

12.59%

Energy

9.45%

8.61%

8.95%

9.52%

Financials

12.42%

12.31%

13.12%

10.85%

Healthcare

11.22%

13.03%

17.44%

15.12%

Industrials

12.54%

11.30%

8.09%

9.14%

Information Technology

26.68%

25.54%

19.22%

23.32%

Materials

3.01%

2.17%

1.11%

1.70%

Telecommunication Services

1.72%

3.13%

3.22%

1.69%

Utilities

0.23%

0.15%

0.54%

0.57%

TOTAL

100.00%

100.00%

100.00%

100.00%

About S&P Dow Jones Indices
S&P Dow Jones Indices LLC, a part of McGraw Hill Financial, is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial AverageTM, S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of investors. More assets are invested in products based upon our indices than any other provider in the world. With over 1,000,000 indices covering a wide range of asset classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. To learn more about our company, please visit www.spdji.com

Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC, a part of McGraw Hill Financial. Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones").  These trademarks have been licensed to S&P Dow Jones Indices LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.

SOURCE S&P Dow Jones Indices

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