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           23 September, 2019


    
Category:  Press » Finances

 

S&P 500 Buybacks Rebound 44%; Remain 80% off Their High

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2009-12-15 04:51:16     
Standard & Poor's

Standard & Poor's, the world's leading index provider, announced today that S&P 500 stock buybacks for the third quarter of 2009 rebounded 44% to $34.8 billion from the $24.2 billion spent during the second quarter of this year when the expenditures set their lowest level since the first quarter of 1998 (when Standard & Poor's first started tracking the data).

According to Standard & Poor's, preliminary results show that S&P 500 issues spent $34.8 billion on stock repurchases during the third quarter of 2009, representing a 61.2% decline from the $89.7 billion spent during the third quarter of 2008, and a 79.7% decline from the record $172.0 billion spent on stock buybacks during the third quarter of 2007.

"As the market continued to recover in the third quarter companies scaled up their buybacks from their anemic levels, but still maintained a low level of activity as cash conscious corporate strategists maintained a close watch, and grip, on expenditures," says Howard Silverblatt, Senior Index Analyst at S&P Indices.

Standard & Poor's has also seen a pickup in new buyback programs over the last two months which are authorizations from the board to management permitting them to execute stock buyback programs, but are not actual buys. Some of the authorizations are replacing expiring programs or those that have reached their limits.

"Standard & Poor's expects stock buybacks to increase in the range of 10% during the fourth quarter of 2009," notes Silverblatt. "However, for 2010, buybacks will continue to remain well below their 2007 peak levels with expenditures being highly correlated to the recovering economy."

Standard & Poor's also determined that during the third quarter of 2009, 195 issues participated in stock repurchase programs, up 15.4% from the second quarter. Additionally, for the second quarter in a row, none of the issues made the top 20 historical list for largest stock buybacks.

On a sector basis, Standard & Poor's notes that the Financials sector rebounded 80.2% from its second quarter stock buyback expenditures, but remains 92.4% below its third quarter 2007 level. Information Technology increased 121.5%, and now accounts for 30.2% of all buybacks, with Consumer Staples having the next highest expenditures at 19.2%. Energy, which was the biggest player in the second quarter, posted a 15.4% drop, with Exxon Mobil accounting for 93.7% of the sector's buybacks.

S&P Indices
S&P 500, $ U.S. BILLIONS, PRELIMINARYS IN BOLD

PERIOD MARKET OPERATING AS REPORTED DIVIDEND &
VALUE EARNINGS EARNINGS DIVIDENDS BUYBACKS BUYBACK
$BILLIONS $BILLIONS $BILLIONS $BILLIONS $BILLIONS YIELD

5 YEARS $11,032 $3,166 $2,536 $1,117 $1,866 5.89%
10 YEARS $10,670 $5,510 $4,418 $1,874 $2,583 4.74%

09/30/09P $9,337 $139.37 $131.96 $47.21 $34.85 3.71%
06/30/09 $8,045 $120.85 $118.22 $47.63 $24.20 5.17%
03/31/09 $6,928 $87.78 $65.29 $51.73 $30.78 7.13%
12/31/08 $7,852 -$0.78 -$202.11 $62.19 $48.12 7.48%
09/30/08 $10,181 $142.90 $86.16 $61.44 $89.71 6.73%
06/30/08 $11,163 $148.43 $112.15 $61.94 $87.91 6.88%
03/30/08 $11,511 $144.63 $135.24 $61.72 $113.90 7.25%
12/31/07 $12,868 $133.38 $68.53 $67.09 $141.71 6.49%
09/30/07 $13,470 $184.13 $133.66 $61.21 $171.95 5.89%
06/30/07 $13,350 $213.65 $194.30 $59.76 $157.76 5.44%
03/31/07 $12,706 $200.23 $190.75 $58.53 $117.70 5.35%
12/31/06 $12,729 $197.35 $181.65 $61.79 $105.18 5.16%

*5 and 10 year market values are averages

S&P Indices
S&P 500 SECTOR BUYBACKS

SECTOR $ MILLIONS Q3,'09 Q2,'09 Q1,'09 Q4,'08 Q3,'08 CHANGE
Q3,'09-
Q3,'08
Consumer Discretionary $4,560 $2,350 $1,794 $1,847 $9,415 -$4,855
Consumer Staples $6,699 $4,013 $3,942 $4,627 $12,184 -$5,485
Energy $4,520 $5,343 $7,953 $11,809 $16,128 -$11,608
Financials $2,108 $1,170 $620 $4,292 $5,978 -$3,870
Healthcare $3,414 $4,699 $7,728 $5,453 $8,331 -$4,917
Industrials $2,026 $1,681 $2,358 $7,524 $12,038 -$10,012
Information Technology $10,535 $4,757 $6,103 $10,968 $21,996 -$11,461
Materials $223 $159 $241 $1,433 $2,280 -$2,057
Telecommunication
Services $139 $13 $29 $87 $1,092 -$953
Utilities $624 $10 $14 $79 $269 $355
S&P 500 $34,848 $24,195 $30,783 $48,117 $89,711 -$54,863

S&P Indices
S&P 500 20 LARGEST Q3 2009 BUYBACKS, $ MILLIONS, CURRENT MEMBERSHIP

COMPANY SECTOR Q3,'09 Q4,'04-
Q3,'09
Exxon Mobil Corp Energy $4,233 $136,382
Wal-Mart Stores Inc Consumer Staples $2,313 $18,060
Hewlett-Packard Co Information Technology $2,102 $36,940
Cisco Systems, Inc Information Technology $1,869 $39,131
Intel Corp Information Technology $1,673 $28,965
Microsoft Corp Information Technology $1,540 $77,910
CVS Caremark Corp Consumer Staples $1,539 $6,932
Philip Morris Int'l Consumer Staples $1,408 $9,514
Travelers Co Financials $971 $8,060
DIRECTV Group, Inc Consumer Discretionary $943 $7,809
Int'l Business Machines Corp Information Technology $929 $50,545
McDonald's Corp Consumer Discretionary $769 $13,492
WellPoint Inc Healthcare $693 $16,124
Entergy Corp Utilities $613 $4,415
AutoZone Inc Consumer Discretionary $587 $3,916
Time Warner Inc Consumer Discretionary $506 $23,040
St. Jude Medical Inc Healthcare $500 $2,500
United Technologies Corp Industrials $430 $9,494
Chubb Corp Financials $403 $5,448
Lockheed Martin Corp Industrials $393 $10,114
Top 20 $24,414 $508,790
S&P 500 $34,848 $1,866,474
Top 20 % of S&P 500 70.06% 27.26%

About S&P Indices

S&P Indices, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1 trillion is directly indexed to Standard & Poor's family of indices, which includes the S&P 500, the world's most followed stock market index, the S&P Global 1200, a composite index comprised of seven regional and country headline indices, the S&P Global BMI, an index with approximately 11,000 constituents, and the S&P GSCI, the industry's most closely watched commodities index.

About Standard & Poor's

Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE: MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data. With offices in 23 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for nearly 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions.

URL: http://www.standardandpoors.com
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