S&P 500 Buybacks Rebound 14.8% in Q3 2020; Remain 42.1% Lower than Q3 2019

  • Q3 2020 share repurchases were $101.8 billion, rebounding 14.8% from Q2 2020’s $88.7 billion expenditure – the lowest level since March 2012.
  • Buybacks remain 42.1% lower than Q3 2020’s $175.9 billion.
  • 190 issues reported buybacks of at least $5 million for the quarter, up from 170 in Q2 2020, and down from 332 in Q3 2019.
  • Buybacks remained top heavy with the top 20 issues accounting for 77.4% of the Q3 2020 buybacks, down from the record 87.2% in Q2 2020 and up from the historical average of 46.2%.

NEW YORK, December 17, 2020: S&P Dow Jones Indices (“S&P DJI”) announced today that preliminary Q3 2020 S&P 500® stock buybacks, or share repurchases, were $101.8 billion – a 14.8% increase from Q2 2020's $88.7 billion and down 42.1% from Q3 2019's $175.9 billion.

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

Key Takeaways:  

  • In Q3 2020, 38% of S&P 500 companies did significant buybacks (of at least $5 million), compared to 34% in Q2 2020, 66% in Q3 2019, and 84% for all of 2019.
  • Q3 2020 buybacks were $101.8 billion, up 14.8% from $88.7 billion in Q2 2020 and down 42.1% from $175.9 billion in Q3 2019.
  • For Q4 2020, buybacks are expected to continue to rebound as more issues venture in to cover employee options; expenditures likely to remain top heavy.
  • For the 12-month September 2020 period, companies spent $570.8 billion, down 25.9% from their 12-month September 2019 expenditure of $770.1 billion. The record 12-month high is $823.2 billion in March 2019.
  • The cumulative rolling four quarters of repurchases continued to impact EPS but declined significantly as companies shied away from excess buybacks, with many issuing shares to improve liquidity. For Q3 2020, 9.6% of issues reduced share counts by at least 4% year-over-year, down from Q2 2019’s 17.8% and 22.8% in Q3 2019; for Q4 2020 the rate is expected to decline further.
  • S&P 500 Q3 2020 dividends decreased 2.9% to $115.5 billion, from Q2 2020’s $119.0 billion, and decreasing 6.2% from the Q3 2019 payment of $123.1 billion. For the 12- month period, dividends were $487.9 billion, up 1.9% from the corresponding 2019 period’s $478.9 billion. S&P 500 2020 payments are expected to post a 1% decline over 2019.
  • Total shareholder return of buybacks and dividends for the quarter came in at $217.3 billion, up 4.6% from the Q2 2020 period expenditure of $207.7 billion and down 27.3% from the $299.0 billion reported for Q3 2019.
  • Total shareholder return for the 12-month September 2020 period declined to $1.059 trillion from September 2019’s $1.249 trillion.
  • The top 20 issues dominated the buybacks, accounting for 77.4% of all buybacks, down from the record Q2 2020’s 87.2% and up from the historical 46.2% average.

"After pulling back on buybacks in Q2 2020, some companies have tiptoed back into the market as they sought shares to cover employee options being exercised and prevent dilution,” said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. “The current COVID view is that longer-term treatment will beat out shorter-term spread and closures, as Q4 2020 expenditures will further rebound, but remain relatively low."

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