S&P 500 quarterly buybacks approach $200 billion and are now 11% off their all-time high of $223 billion set in Q4 2018
NEW YORK, September 23, 2021: S&P Dow Jones Indices (“S&P DJI”) announced today preliminary S&P 500® stock buyback, or share repurchases, data for Q2 2021.
Historical data on S&P 500 buybacks are available at www.spdji.com/indices/equity/sp-500.
Key Takeaways:
- Q2 2021 share repurchases were $198.8 billion, increasing 11.6% from Q1 2021’s $178.1 billion expenditure, and up 124.3% from Q2 2020’s recent low of $88.7 billion.
- 294 companies reported buybacks of at least $5 million for the quarter, down from 335 in Q1 2021, and up from 170 in Q2 2020; 360 issues did some buybacks for the quarter, compared to 289 in Q2 2020.
- Buybacks remained top heavy with the top 20 issues accounting for 55.7% of Q2 2021 buybacks, up from Q1 2021’s 53.3%, down from the dominating 87.2% in Q2 2020, and up from the pre-COVID historical average of 44.5%.
- For the 12-month June 2021 period, buybacks were $609.4 billion, a 22.1% increase from $499.2 billion in the 12-month March 2021 period, and down 5.6% from $644.9 billion in the 12-month June 2020 period.
- Buybacks are expected to continue at a higher level in 2021as companies doing low-level buybacks (mostly for option coverage) increase their programs for share count reduction purchases. The impact of EPS is expected to grow slowly.
- 5.4% of companies reduced share counts used for EPS by at least 4% year-over-year down from Q1 2021's 5.8%, and down significantly from Q2 2020’s 17.8% period (the recent high was in Q1 2016, at 28.2%).
- S&P 500 Q1 2021 dividends decreased a tick by 0.4% to 123.4 billion from Q1 2021’s $123.9 billion and were 3.6% greater than the $119.0 billion in Q2 2020. For the 12-month June 2021 period, dividends were $484.5 billion, down 2.2% on an aggregate basis from prior period’s $495.5 billion.
- Total shareholder return of buybacks and dividends in Q2 2021 was $322.2 billion, up 6.7% from Q1 2021’s $302.0 billion and up 55.1% from Q2 2020’s $207.7 billion (Q4 2018 holds the record, at $342.8 billion).
- Total shareholder return for the 12-months June 2021 increased to $1.09 trillion from March’s $0.98 trillion and decreased from the 12-month June 2020’s $1.14 trillion.
“Companies remain cautious with their buyback expenditures but have generally returned to the market to negate options and are starting to reduce share count in order to boost EPS, said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. “For the quarter, 238 companies reduced their share counts from Q1 2021, up from the prior quarters 208 (90 in Q3 2020), but still far from the 322 in pre-COVID Q1 2020, as the year-over-year significant EPS boost remains historically few (3, compared to 96 in Q1 2020). Given strong earnings and cash-flow, high expenditures are expected to continue, with upward EPS impact increasing.”
