S&P 500 Buybacks Decline 55.4% to $88.7 Billion; Significant Reductions Expected to continue in Q3 2020

-- Q2 2020 share repurchases were $88.7 billion - the lowest since March 2012 and a 55.4% decline from Q1 2020 and 46.4% decline from Q2 2019.

NEW YORK, Sept. 15, 2020 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI") announced today that preliminary Q2 2020 S&P 500® stock buybacks, or share repurchases, were $88.7 billion – a 55.4% decrease from Q1 2020's $198.7 billion and down 46.4% from Q2 2019's $165.5 billion.

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

Key Takeaways:

  • Companies posted a sharp decrease in buyback expenditures as the full effect of the economic impact from COVID-19 was felt. For the quarter, 49% of the S&P 500 companies did buybacks, compared to 79% in Q1 2020.
  • Q2 2020 buybacks were $88.7 billion, down 55.4% from $198.7 billion in Q1 2020 and down 46.4% from $165.5 billion in Q2 2019.
  • For the 12-month June 2020 period, companies spent $644.9 billion, down 19.2% from their 12-month June 2019 expenditure of $798.0 billion. The record 12-month high is $823.2 billion in March 2018.
  • The cumulative rolling four quarters of repurchases continued to impact EPS, but declined, as 18.0% of the issues reduced share counts by at least 4% year-over-year, down from Q1 2019's 19.6% and 24.2% in Q2 2019; for Q3 2020 the rate is expected to decline further.
  • S&P 500 Q2 2020 dividends declined 6.25% to $119.0 billion, from the Q1 2020 record $127.0 billion, and increasing 0.3% from the Q2 2019 payment of $118.7 billion. For the 12-month period, dividends set a record, at $495.5 billion, (the prior record was Q1 2020, at $495.1 billion), up 5.1% from the corresponding 2019 period's $471.5 billion.
  • Total shareholder return of buybacks and dividends for the quarter came in at $207.5 billion, down 36.3% from the Q1 2020 period expenditure of $325.7 billion and down 26.9%% from the $284.1 billion reported for Q2 2019.
  • Total shareholder return for the 12-month June 2020 period declined to $1.140 trillion from June 2019's $1.270 trillion.
  • The top 20 issues dominated the buybacks, accounting for 87.2% of all buybacks, up from Q1 2020's 46.7% and the historical 44.5% average.

"Companies pulled back on buybacks in Q2 2020 as the COVID-19 impact on sales, liquidity, and business lines displaced share repurchases," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.  "Q3 2020 expenditures are expected to be a tick better as those who have strong cash-flow and active business lines continue to buy and some recovering issues venture back-in, even if just to cover employee options and protect EPS."

"Looking beyond Q3, Q4 2020 remains contingent on the economy, which is contingent on the COVID-19 recovery," Silverblatt continued.  As businesses reopen and the economy picks up, companies will need to address prior actions as well as initiate new procedures and policies to function in the new environment, including potential reorganization to address employee location needs and shifts in customer base and cycles.  These expenditures could limit the discretionary buybacks they're able to do."

Q2 2020 GICS® Sector Analysis:

Information Technology continued to lead in buybacks even as S&P 500 expenditures declined 55.4% from the prior quarter. The sector spent $39.6 billion for the quarter, down 37.7% from the prior quarter's $59.1 billion, and down 33.1% from the Q2 2019 $55.2 billion level.  On a percentage basis, the sector increased its representation to 41.6% of all buybacks, up from the prior quarter's 29.8%. For the 12-month June 2020 period, the group spent $197.7 billion, representing 30.7% of the buybacks, down 25.9% from the corresponding 2019 period's $266.8 billion expenditure, which represented 33.4% of the buybacks.

Financial buybacks, which were slightly trailing Information Technology, declined 82.1%, to $8.3 billion from the Q1 2020 $46.6 billion expenditure, and absent Berkshire Hathaway's $ 5.0 billion expenditure was down 92.8%. Their Q2 2020 expenditure represented 9.4% of all buybacks, down from 23.5% in Q1 2019. For the one-year period, the group spent $153.0 billion, representing 23.7% of all buybacks, down 8.4% from their 2019 expenditure of $166.9 billion, which represented 20.9% of the buybacks. For Q3 2020, minimal expenditures are expected, as big-banks have suspended their buybacks for that period.

Communication Services was the only sector to increase, up 37.7% over Q1 2020, thanks to T-Mobile's $17.1 billion expenditure (in connection with the SoftBank Monetization, ranking #13 in index history); absent that, the sector was down 47.9%. For Q2 2020 the sector spent $27.5 billion, up from Q1 2020's 20.0 billion, as it represented 31.1% of the Q2 2020 buybacks.

Of sector Note: Energy declined 98.5% from Q1 2020, Consumer Discretionary fell 91.8%, and Industrials were down 91.2%.

Issues:

The five issues with the highest total buybacks for Q2 2020 are:

  • Apple (AAPL) continued to lead, spending $17.6 billion in Q2 2020, ranking 11th in S&P 500 history, as the level was down 6.4% from their Q1 2020 $18.8 billion expenditure and down 3.3% from their Q2 2019 $18.2 billion. For the 12-month period, Apple has spent $76.0 billion on buybacks, up from 2019's $71.4 billion. Over the five-year period, they have spent $282.9 billion and $378.1 billion over the ten-year period.
  • T-Mobile (TMUS): $17.2 billion for Q2 20120, up from $0.1 billion for Q1 2020; for the 12-months ending in June 2020 they spent $17.3 billion versus $0.2 billion.
  • Alphabet (GOOG/L): $6.9 billion for Q2 20120, down from $8.5 billion for Q1 2020; for the 12-months ending in June 2020 they spent $27.1 billion versus $11.5 billion.
  • Microsoft (MSFT): $5.8 billion for Q2 2020, down from $7.1 billion in Q1 2020; for the 12-months ending in June 2020 they spent $23.0 billion versus $19.5 billion.
  • Regeneron Pharmaceuticals (REGN): $5.5 billion for Q2 2020, up from the $0.5 billion spent in Q1 2020; for the 12-months ending in June 2020 they spent $6.4 billion versus $0.2 billion.

For more information about S&P Dow Jones Indices, please visit www.spdji.com.   

 

S&P Dow Jones Indices








S&P 500 Q2 2020 buyback and related data







As of the close of: 

9/11/2020


































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,'20

$25,637

$1,037.70

$821.66

$495.49

$644.85

1.93%

2.52%

4.45%

12 Mo Jun,19

$24,423

$1,292.68

$1,131.42

$471.54

$798.01

1.93%

3.27%

5.20%

2019

$26,760

$1,304.76

$1,158.22

$485.48

$728.74

1.81%

2.72%

4.54%

2018

$21,027

$1,281.66

$1,119.43

$456.31

$806.41

2.17%

3.84%

6.01%

2017

$22,821

$1,066.00

$940.86

$419.77

$519.40

1.84%

2.28%

4.12%

2016

$19,268

$919.85

$818.55

$397.21

$536.38

2.06%

2.78%

4.85%










6/30/2020 Prelim.

$25,637

$221.12

$146.78

$119.04

$88.66

1.93%

2.52%

4.45%

3/31/2020

$21,424

$161.64

$98.48

$126.98

$198.72

2.31%

3.37%

5.68%

12/31/2019

$26,760

$324.52

$294.29

$126.35

$181.58

1.81%

2.72%

4.54%

9/30/2019

$24,707

$330.42

$282.12

$123.12

$175.89

1.94%

3.12%

5.06%

6/28/2019

$24,423

$333.26

$290.00

$118.68

$165.46

1.93%

3.27%

5.20%

3/29/2019

$23,619

$316.56

$291.82

$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%

 

S&P Dow Jones Indices

S&P 500 SECTOR BUYBACKS

SECTOR $ MILLIONS

Q2,'20

Q4,'19

Q2,'19

12MoJun,'20

12MoJun,'19

5-YEARS

10-YEARS

Q4,'18

Q2,'09









(high)

( low)

Consumer Discretionary

$1,317

$16,087

$15,764

$52,395

$78,825

$395,893

$752,484

$25,652

$2,350

Consumer Staples

$1,514

$5,278

$7,114

$23,730

$36,512

$194,628

$421,945

$9,588

$4,013

Energy

$60

$3,861

$4,552

$13,826

$24,874

$77,762

$264,511

$8,698

$5,343

Financials

$8,346

$46,637

$37,819

$153,005

$166,948

$663,302

$952,002

$45,641

$1,170

Healthcare

$10,706

$20,807

$17,066

$67,562

$93,633

$407,930

$719,061

$31,336

$4,699

Industrials

$1,816

$20,736

$16,967

$46,951

$74,578

$334,127

$577,257

$23,026

$1,681

Information Technology

$36,900

$59,138

$55,187

$197,712

$266,764

$916,393

$1,468,868

$61,298

$4,757

Materials

$184

$4,551

$2,420

$13,252

$16,062

$57,817

$119,311

$5,857

$159

Real Estate

$204

$1,320

$555

$2,791

$2,963

$12,125

$12,125

$1,480


Communication Services

$27,548

$20,002

$7,132

$72,264

$33,125

$107,863

$143,990

$9,556

$13

Utilities

$67

$303

$882

$1,365

$3,720

$6,933

$17,683

$850

$10

TOTAL

$88,661

$198,722

$165,458

$644,852

$798,005

$3,174,773

$5,449,237

$222,980

$24,195

 

S&P Dow Jones Indices

S&P 500 20 LARGEST Q2 2020 BUYBACKS, $ MILLIONS 

Company  

Ticker

Sector

Q2 2020

Q1 2020

Q2 2019

12-Months

12-Months

5-Year

10-Year

Indicated




Buybacks

Buybacks

Buybacks

Jun,'20

Jun,'19

Buybacks

Buybacks

Dividend




$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

Apple 

AAPL

Information Technology

$17,559

$18,761

$18,154

$76,040

$71,443

$282,870

$378,070

$15,124

T-Mobile US

TMUS

Communication Services

$17,128

$141

$4

$17,321

$166

$19,414

$19,585

$0

Alphabet

GOOGL

Communication Services

$6,852

$8,496

$3,577

$27,142

$11,452

$53,138

$53,255

$0

Microsoft 

MSFT

Information Technology

$5,791

$7,059

$4,633

$22,968

$19,543

$80,989

$124,692

$15,470

Regeneron Pharmaceuticals

REGN

Health Care

$5,469

$476

$30

$6,359

$210

$7,170

$7,857

$0

Oracle 

ORCL

Information Technology

$5,346

$4,004

$6,301

$19,905

$36,643

$82,774

$118,725

$4,587

Berkshire Hathaway

BRKA

Financials

$4,998

$1,741

$548

$9,456

$3,479

$12,935

$13,002

$0

Biogen 

BIIB

Health Care

$2,809

$2,220

$2,402

$7,840

$4,410

$22,573

$25,853

$0

Facebook

FB

Communication Services

$2,122

$1,940

$1,752

$7,724

$12,083

$31,916

$35,741

$0

Charter Communications

CHTR

Communication Services

$1,155

$2,352

$861

$8,579

$3,919

$28,071

$28,878

$0

BlackRock

BLK

Financials

$1,125

$657

$7

$1,898

$2,842

$9,154

$17,213

$2,240

Visa

V

Information Technology

$1,072

$3,141

$2,152

$8,862

$8,178

$36,953

$52,671

$2,025

HP

HPQ

Information Technology

$953

$123

$533

$2,228

$2,542

$9,302

$31,843

$1,001

Adobe

ADBE

Information Technology

$904

$1,317

$774

$3,784

$2,748

$10,917

$14,717

$0

Texas Instruments 

TXN

Information Technology

$882

$1,641

$863

$3,468

$5,224

$16,688

$28,684

$3,304

Johnson & Johnson 

JNJ

Health Care

$706

$1,711

$2,486

$4,471

$8,971

$32,564

$62,574

$10,644

Accenture plc 

ACN

Information Technology

$627

$970

$489

$2,733

$2,836

$13,574

$25,476

$2,038

Fiserv

FISV

Information Technology

$604

$970

$2

$1,660

$1,307

$6,603

$9,966

$0

Dollar General

DG

Consumer Discretionary

$602

$63

$185

$1,480

$1,043

$5,008

$8,022

$362

PepsiCo

PEP

Consumer Staples

$567

$649

$793

$2,504

$2,863

$14,578

$32,099

$5,675

Top 20   



$77,271

$58,432

$46,545

$236,422

$201,902

$777,192

$1,088,923

$62,470

S&P 500



$88,661

$198,722

$644,603

$644,604

$798,005

$3,174,525

$5,448,990

$503,015

Top 20 % of S&P 500



87.15%

29.40%

7.22%

36.68%

25.30%

24.48%

19.98%

12.42%

   Gross values are not adjusted for float











S&P Dow Jones Indices

S&P 500 20 Largest Quarterly Buybacks, $ Millions, as of Q2 2020; Apple added at #11 and T-Mobile at #13

$ MILLIONS

QUARTER

COMPANY

SECTOR


$23,811

Q1 2019

Apple

Information Technology

1

$22,908

Q1 2018

Apple

Information Technology

2

$22,085

Q4 2019

Apple

Information Technology

3

$21,860

Q2 2018

Apple

Information Technology

4

$21,162

Q2 2006

QUALCOMM

Information Technology

5

$19,364

Q3 2018

Apple

Information Technology

6

$18,761

Q1 2020

Apple

Information Technology

7

$18,154

Q2 2019

Apple

Information Technology

8

$18,036

Q1 2014

Apple

Information Technology

9

$17,635

Q3 2019

Apple

Information Technology

10

$17,559

Q2 2020

Apple

Information Technology

11

$17,319

Q3 2014

Apple

Information Technology

12

$17,128

Q2 2020

T-Mobile

Communication Services

13

$16,413

Q2 2013

Apple

Information Technology

14

$15,707

Q3 2007

International Business Machines 

Information Technology

15

$13,420

Q3 2015

Apple

Information Technology

16

$12,852

Q4 2013

Johnson & Johnson 

Healthcare

17

$12,318

Q4 2016

Allergan plc (AGN)

Healthcare

18

$12,183

Q2 2012

Johnson & Johnson 

Healthcare

19

$11,480

Q4 2016

Apple

Information Technology

20

 

S&P Dow Jones Indices

S&P 500 Q2 2020 Buyback Report





SECTOR

DIVIDEND

BUYBACK 

COMBINED


YIELD

YIELD

YIELD

Consumer Discretionary

0.75%

1.68%

2.43%

Consumer Staples

3.55%

1.23%

4.78%

Energy

6.72%

2.24%

8.96%

Financials

2.56%

5.39%

7.94%

HealthCare

1.77%

1.75%

3.52%

Industrials

1.86%

2.04%

3.89%

Information Technology

1.14%

2.60%

3.73%

Materials

2.13%

1.78%

3.92%

Real Estate

3.04%

0.38%

3.42%

Communications Services

1.27%

2.80%

4.06%

Utilities

3.53%

0.17%

3.70%

S&P 500

1.85%

2.36%

4.21%


   Uses full values (unadjusted for float)

   Dividends based on indicated; buybacks based on the last 12-months ending Q2,'20

 

Share Count Changes



(Y/Y diluted shares used for EPS)

>=4%

<=-4%

Q2 2020

8.42%

18.04%

Q1 2020

8.00%

19.60%

Q4 2019

7.63%

20.68%

Q3 2019

8.62%

22.85%

Q2 2019

7.98%

24.15%

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%

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.

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