S&P 500 Buybacks Return to $200 Billion Range in Q1 2020; Expectations for Q2 2020 are Low as Companies Suspend Programs

  • Q1 2020 share repurchases were $198.7 billion – the fourth largest on record and a 9.4% gain over Q4 2019, and 3.4% lower than Q1 2019.
  • Buybacks remained top heavy, even as they declined, with the top 20 companies accounting for 46.7% of the total, down from Q4 2019's 55.0%; the historical average is 44.6%
  • Expectations for Q2 2020 buybacks have been limited by significant program suspensions as Q2 execution was limited to issues with positive cash-flow.

NEW YORK, June 25, 2020: S&P Dow Jones Indices (“S&P DJI”) announced today that preliminary Q1 2020 S&P 500® stock buybacks, or share repurchases, were $198.7 billion – a 9.4% increase over Q4 2019's $181.6 billion, but down 3.4% from Q1 2019's $205.81 billion record.

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

Key Takeaways:  

  • Companies posted the third consecutive quarter of increased buyback expenditures, returning to the $200 billion range, as the U.S. economic impact of the COVID-19 was just starting. For the quarter, S&P 500 companies spent $198.7 billion on buybacks, up 9.4% from their Q4 2019 $181.6 billion mark, but down 3.4% from last year's Q1 2019 expenditure of $205.8 billion.
  • For the 12-month March 2020 period, companies spent $721.6 billion, down 12.3% from the record 12-month March 2019's $823.2 billion. The cumulative rolling four quarters of repurchases continued to impact EPS as 19.3% of the issues reduced share counts by at least 4% year-over-year, down from Q4 2019's 20.7% and 24.9% in Q1 2019.
  • S&P 500 Q1 2020 dividends set a quarterly record, increasing to $127.0 billion, up 8.2% from Q1 2019's $117.3 billion; for the 12-month period, dividends set a record with $495.1 billion, up 6.6% from the corresponding prior period's $464.4 billion.
  • Total shareholder return of buybacks and dividends for the quarter came in at $325.7 billion, the second largest in history (Q4 2018 was $342.8 billion), up 5.8% from the Q4 2019 period expenditure of $307.9 billion and up 0.8%% from the $323.1 billion reported for Q1 2019.
  • Total shareholder return for the 12-month March 2020 period declined to $1.217 trillion from March 2019's record $1.288 trillion.
  • Buybacks continued to be top heavy, as the top 20 issues represented 46.7% of all buybacks, down from Q4 2019's 55.0%.

"Companies went out with a bang in Q1 2020 with respect to buybacks, returning to the $200 billion range for the quarter, reminiscent of the tax-inspired record-setting buying spree of 2018," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "While the expenditures for Q1 2020 were in line with the estimates at year-end 2019, expectations have significantly fallen since then due to the COVID-19 impact, as companies suspended their forward buybacks. But for Q1, they were all-in."

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