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S&P 500 Share Buybacks Set All-Time High in 3Q

Dec 19, 2018

 
 
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  • S&P 500 Dow Jones Indices reported preliminary shareholder return data for the S&P 500 Index in 3Q2018 with several metrics reaching record high levels.  
     
  • Companies in the S&P 500 Index bought back a record USD$203.8bn worth of share in 3Q2018, up 57.7% y/y from USD$129.2bn.
     
  • As can be seen in the chart below, S&P 500 share buybacks have set record highs in each of the last three quarters, recording q/q growth of 38.02% to USD$189.05bn of share buybacks in 1Q2018, q/q growth of 0.83% to USD$190.62bn of share buybacks in 2Q2018, and q/q growth of 6.89% in share buybacks in 3Q2018.
     
  • Companies in the S&P 500 also set a record for total dividend payments to shareholders in 3Q2018 with USD$115.72bn paid out to shareholders, up 9.74% y/y from USD$105.45bn. Additionally, S&P 500 dividend payments of USD$11.60bn in 2Q2018 was a record at the time. 
     
  • Although companies in the S&P 500 have set a record for total dividend payments in the last two quarters, quarterly dividend payment growth has severely lagged that of quarterly share buybacks. It is important to note, however, that share buybacks also grow dividend payments per share.

 

Source: Capital IQ

 

  • S&P 500 Share buybacks in 3Q2018 were largely top heavy with the top 20 companies that bought back shares accounting for 54.3% of the total for the index. The following companies led share buybacks in the quarter:
     
  • Qualcomm Inc. (QCOM) spent USD$21.2bn in 3Q2018 buying back shares, ranking third for the most share buybacks in a quarter by any company in the S&P 500. Qualcomm is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas. 
     
  • Apple Inc. (AAPL) bought back USD$19.4bn of share in 3Q2018. Apple possesses 7 of the top 8 rankings for the most quarterly share buybacks in the S&P 500. Apple is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas. 
     
  • Oracle (ORCL) spent USD$10.3bn in 3Q2018 buying back shares, up 106% q/q from USD$5.0bn and up 1,187.50% y/y from USD$0.8bn. Oracle is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Top Buy” in our US Information Technology Global Top Stock Ideas. 
     
  • Wells Fargo (WFC) bought back USD$7.4bn worth of shares in 3Q2018, up 155.2% q/q from USD$2.9bn and up 184.62% y/y from USD$2.0bn. Wells Fargo is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. 
     
  • Cisco Systems (CSCO) spent USD$5.4bn in 3Q2018 buying back shares, down 11.48% q/q from USD$6.1bn and up 240.0% y/y from USD$2.0bn. Cisco Systems is rated “Neutral” in our US Large-Cap Global Top Stock Ideas and “Neutral” in our US Information Technology Global Top Stock Ideas.

 

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