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Fourth Highest Amount Spent on Buybacks by S&P 500 Since 2005, Led by Apple

Companies and Markets   |   Earnings   |   Risk, Performance, and Reporting

By FactSet Insight  |  December 16, 2014

For the third quarter, aggregate share buybacks amounted to $143.4 billion. This dollar level reflected a year-over-year increase of 16.0% and a quarter-over-quarter increase of 6.6%. This quarter also marked the fourth highest quarter for spending on buybacks by companies in the S&P 500 since 2005 (when FactSet started tracking the data), trailing only Q3 2007 ($178.7 billion), Q2 2007 ($161.7 billion), and Q1 2014 ($160.4 billion).

On a trailing 12-month basis (TTM), spending on buybacks by S&P 500 companies totaled $567.2 billion. This amount reflected a year-over-year increase of 26.9% compared to the spending over the prior (year-ago) 12-month period. Again, the third quarter reflected the fourth highest quarter for spending on buybacks on a trailing 12-month basis since 2005, behind only Q4 2007 ($618.0 billion), Q3 2007 ($603.3 billion), and Q1 2008 ($593.6 billion) 

Apple Drives Increase with Second Highest Quarterly Repurchase

At the company level, Apple was the largest contributor to the increase in dollar-level share repurchases on a year-over-year basis. The company spent $17.0 billion in share repurchases during Q3 2014, which was the highest amount spent by any company in the index and reflected a 240% increase over the yearago quarter ($5 billion). It is important to note that $9 billion of the $17 billion dollar total was a payment for a new accelerated share repurchase arrangement (“ASR”) initiated in August. This marked the second-highest dollar amount spent on buybacks during a quarter by an individual company since 2005 (when FactSet started tracking the data), trailing only Apple’s $18.6 billion dollar purchase during Q1 2014. On a trailing 12-month basis (TTM), Apple has now spent the highest amount on buybacks of all the companies in the index. Apple’s total spending over this time frame ($55.9 billion) is nearly three times higher than IBM’s total spending ($19.3 billion), which is the second-highest amount in the index. 

Aside from Apple (+$12.0 billion), a number of other companies were also significant contributors to the dollar-level increase in buybacks compared to the year-ago quarter, including Monsanto (+$4.5 billion), Intel (+$3.6 billion), CBS Corporation (+$2.8 billion), Merck (+$2.5 billion), and Johnson & Johnson (+$2.3 billion). On the other hand, companies that recorded substantial year-over-year declines in dollar-level spending on buybacks included Halliburton (-$3.0 billion), Pfizer (-$2.5 billion), and QUALCOMM (-$2.1 billion).

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Buyback Participation: 75%
Overall, 374 companies (or 75% of the index) participated in share buybacks during Q3 2014. Despite the increase in dollar-level spending on share repurchases compared to the year-ago quarter, the number of companies that participated in share repurchases fell by 2% (to 374 from 381) relative to Q3 2013. On a sequential basis (compared to Q2 2014), the number of companies that participated in a share repurchases dropped by 1 (to 374 from 375).

Read more about the buyback activity of the S&P 500 companies and sectors in this quarter's edition of FactSet Buyback Quarterly. Visit www.factset.com/buyback to launch the report now.

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