Apple (AAPL, Financial) topped a list of companies that made the biggest share buybacks of the fourth quarter of 2017, repurchasing $10.1 billion of its outstanding shares.
Apple’s fourth quarter repurchases grew from $7.8 billion for the third quarter of 2017, a report from S&P Dow Jones Indices said Wednesday. It was followed by Citigroup (C), which made $5.5 billion in buybacks, Bank of America (BAC) with $4.9 billion and JPMorgan (JPM) with $4.81 billion.
Apple’s board increased its share repurchase program in May 2017 to $210 billion from $175 billion. As of Dec. 30, it had already used $176 billion.
The wave of buybacks came against a backdrop of generous returns to shareholders by corporations. Stock buybacks by S&P 500 companies increased 6% to $129.2 billion from $135.3 billion the previous quarter. They rose 1.2% from $135.3 billion in the fourth quarter.
For the full year, S&P 500 repurchases totaled $519.4 billion, a 3.2% decrease from $536.4 billion in 2016. The all-time high was $589.4 billion in 2007.
"Fewer index issues are experiencing a significant EPS tailwind, as share count reductions greater than 4% have yet to match the 20%+ levels from parts of 2015 and 2016,” said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.
"Buyback concentration slightly declined for the quarter. The 20 issues with the most quarterly expenditures accounted for 44.8% ($61.4 billion) of all share repurchases, down from 45.5% ($58.8 billion) for Q3 2017 and 46.7% ($63.2 billion) for Q4 2016; the five-year average is 41.5%."
Apple’s sector, information technology, spent $35.8 billion on buybacks, reflecting a 28.3% rise. Energy also came back strong, expending $5.2 billion on repurchases, increasing 124% from the third quarter and 431% from fourth quarter 2016. The sector still lags its swells from a decade ago, when the industry purchased $25.3 billion of its own shares in the fourth quarter of 2007.
Companies also returned more to shareholders in the form of dividends in the fourth quarter. Dividends increased 3.8% sequentially to a record $109.5 billion. The full year set records with $419.8 billion in dividend payments, a 5.7% increase from the previous year.
"Dividends, which are on track to set a seventh consecutive record annual payment for 2018, may return to double-digit gains last seen in 2015; 2016 posted a 5.4% gain and 2017 had a 7.0% gain,” Silverblatt said.
