For the 12 months ending in the first quarter, stock buybacks at S&P 500 companies jumped 9.5% from the prior year period to $589.4 billion spent in total, an index record last set in 2007.
For the first quarter, total share buybacks rose 12% from the prior year quarter to $161.4 billion spent in total, the second largest expenditure since 2007.Ă‚ According to Dow Jones Indices, the quarterly figure also represents a 10.6% increase from the fourth quarter.Ă‚
Buyback increases were led by the health care sector, whose constituents increased spending 86.1% to buy $30.6 billion of their shares compared to the prior year quarter. Gilead Sciences (GILD, Financial) spend the most, at $8 billion, ranking it as the 18th largest buyback in the index’s history.
The energy sector ranked as the least repurchasing sector, with companies spending only $2.1 billion, a fall of 62.9% from the prior year quarter. Exxon, for example, fell to 58th in the list of biggest repurchases, from 53rd place the previous quarter, spending $0.73 billion, a plunge from $4.9 billion in the $100 per-barrel oil-price heyday of the first quarter 2014.
The information technology sector saw the most repurchasing, at 21.5%, although the percentage decreased from 24.4% in the fourth quarter.
Total shareholder return, including dividends and buybacks, also set a record at $257.6 billion for the quarter and $974.6 billion for the 12 months ending in March. Total dividend payouts, however, declined in the first quarter after seven consecutive record payments due primarily to dividend cuts in the energy sector.
"The Q4 2015 uptick in buybacks was a surprise to many in the market, but it continued in Q1 2016," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.
"The pace of buybacks was partially driven by companies supporting their stock during the opening downturn of the year, which coincidentally started in early February when many earnings lock-ups ended. The upswing in both expenditures and participation appears to persist in the market, meaning that the upturn in Q4 was not a single-shot. Looking at Q2 2016, the share count reduction trend is already baked in, as more than 20% of the issues have reduced their share count by at least 4% from Q2 2015."
Five companies dominated the list of prodigious repurchasers aside from Gilead. Apple (AAPL, Financial) was second, spending $6.7 billion, though down slightly from $6.9 billion from the prior quarter. General Electric (GE, Financial) followed as third, spending $6.3 billion compared to $1.7 billion. Pfizer (PFE, Financial) was forth spending $5 billion and McDonald’s (MCD, Financial) as fifth spend $4.3 billion.
Apple
Apple as of first quarter-end was the third most-held guru stock with 44 guru owners.
Apple Inc. has a market cap of $523.37 billion; its shares were traded around $95.55 with a P/E ratio of 10.63 and P/S ratio of 2.38. The trailing 12-month dividend yield of Apple Inc. stocks is 2.23%. The forward dividend yield of Apple Inc. stocks is 2.38%. Apple Inc. had an annual average earnings growth of 49.8% over the past 10 years. GuruFocus rated Apple Inc. the business predictability rank of 4.5-star.
General Electric
GE is the 11th most-held guru stock with 36 owners.
General Electric Co. has a market cap of $283.04 billion; its shares were traded around $30.78 with a P/E ratio of 42.74 and P/S ratio of 2.62. The trailing 12-month dividend yield of General Electric Co. stocks is 2.99%. The forward dividend yield of General Electric Co. stocks is 2.97%.
Pfizer
Pfizer was the 10th most-held guru stock with 37 owners.
Pfizer Inc. has a market cap of $209.06 billion; its shares were traded around $34.47 with a P/E ratio of 28.24 and P/S ratio of 4.24. The trailing 12-month dividend yield of Pfizer Inc. stocks is 3.36%. The forward dividend yield of Pfizer Inc. stocks is 3.45%. Pfizer Inc. had an annual average earnings growth of 2.6% over the past 10 years.
McDonald’s
McDonald’s is the 59th most-held guru stock with 22 owners.
McDonald's Corp. has a market cap of $105.89 billion; its shares were traded around $120.62 with a P/E ratio of 23.23 and P/S ratio of 4.43. The trailing 12-month dividend yield of McDonald's Corp. stock is 2.93%. The forward dividend yield of McDonald's Corp. stocks is 2.9%. McDonald's Corp. had an annual average earnings growth of 10.1% over the past 10 years. GuruFocus rated McDonald's Corp. the business predictability rank of 2.5-star.
See more companies buying back their shares at the All-in-One screener here. See the most bought, held and sold stocks at the S&P 500 screener here.
