- Q2 2019 share repurchases were $164.5 billion – 20.1% lower than Q1 2019,13.7% lower than Q2 2018, and 26.2% lower than the record Q4 2018.
- Apple continues to lead, spending $18.2 billion – down from last quarter’s issue level record $23.8 billion, but still the 6th highest expenditure historically.
- Buybacks remain concentrated among the top 20 companies, accounting for 50.4% of the total.
- Buybacks for the 12-month period ending in June 2019 were $797.0 billion – down from $823.2 billion in Q1 2019, but up 23.4% from the same period last year.
- Buyback impact remains broad, as one in four companies used buybacks to reduce their share count by at least four percent and increase their EPS.
NEW YORK, September 16, 2019: 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%.
