NEW YORK, Dec. 19, 2023 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI") today announced the preliminary S&P 500® stock buybacks, or share repurchases, data for Q3 2023.
Historical data on S&P 500 buybacks are available at www.spdji.com/indices/equity/sp-500.
Key Takeaways:
"The share count impact on EPS decreased for the fourth consecutive quarter, even as companies increased their overall buybacks due to the counter impact of both share issuance and option exercising coverage. While buybacks supported share price, only 13.5% of the issues saw a materially significant increase (of at least 4%) in their EPS due to share count reduction, compared to 21.2% in Q3 2022. Additionally, fewer companies did buybacks, demonstrating a growing concern over cash expenditures. Companies with strong cashflows however continued to aggressively do buybacks, as the top 20 issues accounted for over half of the buybacks in Q3 2023," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.
"Given the market's expectations for interest rates to decline even as higher-for-longer interest rates continue, companies may be shy of financing buybacks going forward as discretionary buybacks may need to be financed from ongoing operations. For Financials, the new banking regulations are seen as limiting buybacks, as purchases may be used for option coverage, with minimal discretionary purchases, which reduce share count and increase EPS. Top-tier cash-flow issues however are seen as continuing their buybacks and positively impacting their EPS. Notably, and potentially adding to the cost later in 2024, is the ongoing budget discussions and quest for government income as increasing the 1% buyback tax appears to be an attractive target from both sides of the aisle."
1% Buyback Excise Tax for 2023:
The new 1% excise tax on net buybacks reduced Q3 2023 operating earnings by 0.39%, up from Q2's 0.34% and down from the proforma 0.46% for Q3 2022, as the proforma 2022 was 0.51%. The tax on As Reported GAAP earnings increased to 0.42%, up from the Q2 2023 0.38%, down from the proforma 0.52% for Q3 2022, as the proforma 2022 rate was 0.58%.
Silverblatt added: "The 1% tax remains an expense but has not impacted overall buybacks at this point. Given the initial 1% buyback tax had bipartisan support and has remained an attractive cash generator for the government, there is an expectation that some increase or potential change to the type of buybacks that are taxed will remain on the table into next year. Given that corporate sensitivity to costs has increased, a buyback tax rate of 2%, down from a 2.5% rate when companies were less sensitive, was seen as impacting both buybacks and the EPS of share-count-reduction as some of the expenditures may shift from buybacks to dividends. However, any shift would not be on a-dollar-for-dollar basis as dividends remain a long-term pure cash-flow item which must be incorporated into corporate budgets."
Q3 2023 GICS® Sector Analysis:
Information Technology maintained its lead in buybacks. For Q3 2023, the sector increased their expenditure 3.0% to $48.6 billion, representing 26.2% of all S&P 500 buybacks. This compared to the $47.1 billion spent in Q2 2023, which represented 27.0% of all buybacks; for Q3 2022, the sector spent $60.8 billion, 25.2% higher. For the 12-month September period the sector spent $199.3 billion, down 28.6% from the prior period's $279.2 billion.
Financials pulled back again for the quarter, as concerns over new regulations and declining margins increased. The sector pulled back in Q2, Q3 and Q4 2022 over economic issues and to protect their dividends, but then started up again in Q1 2023. For Q3 2023, Financials spent $29.3 billion on buybacks, accounting for 15.8% of all S&P 500 buybacks, down from the Q2 2023 expenditure of $32.7 billion and the $46.9 billion from Q1 2023. For the 12-month September 2023 period, Financials spent $131.4 billion, down from $150.4 billion for the 12-month September 2022 period. Given the current banking environment and new regulatory requirements, Financials may limit their current buybacks as they again look to protect their dividends.
Energy decreased their buybacks for the fourth consecutive quarter, after significantly increasing them in the years prior. For Q3 2023, Energy expenditures declined 11.1% to $16.2 billion, representing 8.7% of the buybacks compared to the prior quarter's $18.3 billion, and were 26.3% lower than Q3 2022's $22.0 billion level. For the 12-month period ending in September 2023, Energy spent $73.6 billion on buybacks, up 42.8% from the prior period's $51.6 billion.
Health Care buybacks increased 11.6% for the quarter, spending $15.0 billion in Q3 2023, representing 8.1% of all buybacks, compared to $13.4 billion in Q2 2023. The quarter was down 25.8% from the Q3 2022's $20.2 billion. For the 12-month September period, the sector spent $76.0 billion, down 24.3% from prior 12-month period's $100.3 billion.
Of note, Real Estate significantly increased their Q3 2023 buybacks to $853 million from their Q2 2023 pullback of a minimal $71 million and was up 7.5% over the Q3 2022 $793 million expenditure. For the 12-month September 2023 the sector spent $2.2 billion, compared to the 2022 period's $3.7 billion.
Issues:
The five issues with the highest total buybacks for Q3 2023 were:
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S&P Dow Jones Indices | |||
S&P 500 proforma net buyback tax impact | |||
TAX | TAX % OF | TAX % OF | |
$ BILLIONS | OPERATING | AS REPORTED | |
Q3 2023 | $1.70 | 0.39 % | 0.42 % |
Q2 2023 | $1.55 | 0.34 % | 0.38 % |
Q1 2023 | $1.98 | 0.45 % | 0.49 % |
2022 proforma | $8.47 | 0.51 % | 0.58 % |
2021 proforma | $7.93 | 0.45 % | 0.47 % |
S&P Dow Jones Indices | ||||||||
S&P 500, $ U.S. BILLIONS | (preliminary in bold) | |||||||
PERIOD | MARKET | OPERATING | AS REPORTED | DIVIDEND & | ||||
VALUE | EARNINGS | EARNINGS | DIVIDENDS | BUYBACKS | DIVIDEND | BUYBACK | BUYBACK | |
$ BILLIONS | $ BILLIONS | $ BILLIONS | $ BILLIONS | $ BILLIONS | YIELD | YIELD | YIELD | |
12 Mo Sep,'23 | $35,938 | $1,756.63 | $1,541.07 | $580.21 | $787.26 | 1.61 % | 2.19 % | 3.81 % |
12 Mo Sep,'22 | $30,119 | $1,715.46 | $1,578.65 | $552.40 | $981.59 | 1.83 % | 3.26 % | 5.09 % |
2022 | $32,133 | $1,656.66 | $1,453.43 | $564.57 | $922.68 | 1.76 % | 2.87 % | 4.63 % |
2021 | $40,356 | $1,762.75 | $1,675.22 | $511.23 | $881.72 | 1.27 % | 2.18 % | 3.45 % |
2020 | $31,659 | $1,019.04 | $784.21 | $483.18 | $519.76 | 1.53 % | 1.64 % | 3.17 % |
2019 | $26,760 | $1,304.76 | $1,158.22 | $485.48 | $728.74 | 1.81 % | 2.72 % | 4.54 % |
2018 | $21,027 | $1,281.66 | $1,119.43 | $456.31 | $806.41 | 2.17 % | 3.84 % | 6.01 % |
9/30/203 Prelim. | $35,938 | $438.07 | $399.35 | $144.18 | $185.62 | 1.61 % | 2.19 % | 3.81 % |
6/30/2023 | $37,162 | $457.93 | $405.66 | $143.20 | $174.92 | 1.55 % | 2.19 % | 3.74 % |
3/31/2023 | $34,342 | $439.08 | $404.57 | $146.76 | $215.53 | 1.67 % | 2.50 % | 4.17 % |
12/31/2022 | $32,133 | $421.55 | $331.50 | $146.07 | $211.19 | 1.76 % | 2.87 % | 4.63 % |
9/30/2022 | $30,119 | $422.94 | $373.04 | $140.34 | $210.84 | 1.83 % | 3.26 % | 5.09 % |
6/30/2022 | $31,903 | $395.02 | $360.21 | $140.56 | $219.64 | 1.70 % | 3.15 % | 4.85 % |
3/31/2022 | $38,288 | $417.16 | $388.68 | $137.60 | $281.01 | 1.37 % | 2.57 % | 3.94 % |
12/31/2021 | $40,356 | $480.35 | $456.72 | $133.90 | $270.10 | 1.27 % | 2.18 % | 3.45 % |
9/30/2021 | $36,538 | $441.26 | $420.64 | $130.04 | $234.64 | 1.37 % | 2.03 % | 3.40 % |
6/30/2021 | $36,325 | $439.95 | $409.02 | $123.38 | $198.84 | 1.33 % | 1.68 % | 3.01 % |
3/31/2021 | $33,619 | $401.19 | $388.84 | $123.91 | $178.13 | 1.43 % | 1.48 % | 2.91 % |
12/31/2020 | $31,659 | $321.81 | $265.00 | $121.62 | $130.59 | 1.53 % | 1.64 % | 3.17 % |
9/30/2020 | $27,868 | $314.06 | $273.29 | $115.54 | $101.79 | 1.75 % | 2.05 % | 3.80 % |
6/30/2020 | $25,637 | $221.53 | $147.44 | $119.04 | $88.66 | 1.93 % | 2.52 % | 4.45 % |
3/31/2020 | $21,424 | $161.64 | $98.48 | $126.98 | $198.72 | 2.31 % | 3.37 % | 5.68 % |
12/31/2019 | $26,760 | $324.52 | $294.29 | $126.35 | $181.58 | 1.81 % | 2.72 % | 4.54 % |
9/30/2019 | $24,707 | $330.42 | $282.12 | $123.12 | $175.89 | 1.94 % | 3.12 % | 5.06 % |
S&P Dow Jones Indices | |||||||
S&P 500 SECTOR BUYBACKS | |||||||
SECTOR $ MILLIONS | Q3,'23 | Q2,'23 | Q3,'22 | 12MoSep,'23 | 12MoSep,'22 | 5-YEARS | 10-YEARS |
Consumer Discretionary | $18,809 | $17,664 | $19,542 | $73,592 | $106,308 | $359,208 | $785,194 |
Consumer Staples | $5,014 | $4,265 | $11,316 | $22,595 | $43,213 | $155,856 | $372,536 |
Energy | $16,233 | $18,253 | $22,014 | $73,623 | $51,563 | $162,031 | $270,672 |
Financials | $29,303 | $32,742 | $23,027 | $131,433 | $150,447 | $725,984 | $1,245,258 |
Healthcare | $14,960 | $13,408 | $20,152 | $75,956 | $100,327 | $399,882 | $774,722 |
Industrials | $14,286 | $12,585 | $17,113 | $63,513 | $75,960 | $302,527 | $650,528 |
Information Technology | $48,554 | $47,134 | $60,771 | $199,264 | $279,174 | $1,151,611 | $1,946,702 |
Materials | $5,278 | $3,154 | $5,678 | $18,753 | $31,082 | $93,455 | $163,840 |
Real Estate | $853 | $71 | $793 | $2,178 | $3,696 | $12,987 | $19,878 |
Communication Services | $32,020 | $25,371 | $30,297 | $124,343 | $137,113 | $474,928 | $497,340 |
Utilities | $306 | $279 | $140 | $2,010 | $2,710 | $13,482 | $19,331 |
TOTAL | $185,615 | $174,924 | $210,843 | $787,260 | $981,593 | $3,851,950 | $6,746,002 |
SECTOR BUYBACK MAKEUP % | Q3,'23 | Q2,'23 | Q3,'22 | 12MoSep,'23 | 12MoSep,'22 | 5-YEARS | 10-YEARS |
Consumer Discretionary | 10.13 % | 10.10 % | 9.27 % | 9.35 % | 10.83 % | 9.33 % | 11.64 % |
Consumer Staples | 2.70 % | 2.44 % | 5.37 % | 2.87 % | 4.40 % | 4.05 % | 5.52 % |
Energy | 8.75 % | 10.43 % | 10.44 % | 9.35 % | 5.25 % | 4.21 % | 4.01 % |
Financials | 15.79 % | 18.72 % | 10.92 % | 16.69 % | 15.33 % | 18.85 % | 18.46 % |
Healthcare | 8.06 % | 7.66 % | 9.56 % | 9.65 % | 10.22 % | 10.38 % | 11.48 % |
Industrials | 7.70 % | 7.19 % | 8.12 % | 8.07 % | 7.74 % | 7.85 % | 9.64 % |
Information Technology | 26.16 % | 26.95 % | 28.82 % | 25.31 % | 28.44 % | 29.90 % | 28.86 % |
Materials | 2.84 % | 1.80 % | 2.69 % | 2.38 % | 3.17 % | 2.43 % | 2.43 % |
Real Estate | 0.46 % | 0.04 % | 0.38 % | 0.28 % | 0.38 % | 0.34 % | 0.29 % |
Communication Services | 17.25 % | 14.50 % | 14.37 % | 15.79 % | 13.97 % | 12.33 % | 7.37 % |
Utilities | 0.16 % | 0.16 % | 0.07 % | 0.26 % | 0.28 % | 0.35 % | 0.29 % |
TOTAL | 100.00 % | 100.00 % | 100.00 % | 100.00 % | 100.00 % | 100.00 % | 100.00 % |
S&P Dow Jones Indices | ||||||||||
S&P 500 20 LARGEST Q3 2023 BUYBACKS, $ MILLIONS | ||||||||||
Company | Ticker | Sector | Q3 2023 | Q2 2023 | Q3 2022 | 12-Months | 12-Months | 5-Year | 10-Year | Indicated |
Buybacks | Buybacks | Buybacks | Sep,'23 | Sep,'22 | Buybacks | Buybacks | Dividend | |||
$ Million | $ Million | $ Million | $ Million | $ Million | $ Million | $ Million | $ Million | |||
Apple | AAPL | Information Technology | $21,315 | $19,863 | $24,736 | $82,981 | $95,625 | $416,839 | $641,080 | $14,108 |
Alphabet | GOOGL | Communication Services | $15,787 | $14,969 | $15,392 | $60,720 | $57,362 | $207,078 | $223,822 | $0 |
Meta Platforms | META | Communication Services | $5,657 | $2,590 | $7,365 | $26,141 | $45,600 | $120,644 | $138,170 | $0 |
Microsoft | MSFT | Information Technology | $4,831 | $5,704 | $5,573 | $21,503 | $30,585 | $125,924 | $187,717 | $22,289 |
NVIDIA | NVDA | Information Technology | $4,570 | $3,739 | $3,779 | $10,373 | $10,579 | $24,501 | $30,212 | $395 |
Exxon Mobil | XOM | Energy | $4,412 | $4,340 | $4,494 | $17,767 | $10,634 | $29,597 | $52,276 | $15,375 |
Bristol-Myers Squibb | BMY | Health Care | $4,000 | $905 | $585 | $7,571 | $8,336 | $28,289 | $31,309 | $5,014 |
Visa | V | Financials | $3,756 | $3,048 | $2,106 | $12,231 | $11,709 | $49,752 | $78,476 | $3,342 |
Comcast | CMCSA | Communication Services | $3,543 | $2,051 | $3,525 | $11,285 | $11,868 | $27,846 | $54,416 | $4,774 |
Chevron | CVX | Energy | $3,334 | $4,340 | $3,697 | $14,698 | $5,386 | $26,151 | $32,422 | $10,717 |
Marathon Petroleum | MPC | Energy | $2,819 | $3,068 | $3,908 | $9,067 | $9,496 | $22,100 | $30,829 | $1,319 |
T-Mobile US | TMUS | Communication Services | $2,691 | $3,661 | $567 | $13,619 | $790 | $34,905 | $37,008 | $1,346 |
Booking Holdings | BKNG | Consumer Discretionary | $2,640 | $3,099 | $1,990 | $10,232 | $4,282 | $26,024 | $36,814 | $0 |
Deere & Company | DE | Industrials | $2,553 | $2,147 | $1,120 | $7,246 | $3,647 | $15,434 | $22,105 | $1,603 |
Netflix | NFLX | Communication Services | $2,500 | $645 | $0 | $3,545 | $224 | $4,370 | $4,370 | $0 |
JPMorgan Chase & Co. | JPM | Financials | $2,382 | $2,477 | $0 | $7,549 | $5,284 | $65,565 | $114,787 | $12,206 |
DuPont de Nemours | DD | Materials | $2,001 | $0 | $252 | $5,279 | $1,650 | $12,581 | $22,302 | $661 |
Salesforce) | CRM | Information Technology | $1,925 | $1,949 | $1,677 | $8,251 | $1,677 | $9,928 | $9,928 | $0 |
Mastercard | MA | Financials | $1,908 | $2,419 | $1,552 | $9,699 | $7,755 | $34,382 | $53,532 | $2,197 |
Valero Energy | VLO | Energy | $1,787 | $942 | $877 | $5,988 | $2,781 | $10,672 | $18,725 | $1,441 |
Top 20 | $94,411 | $81,956 | $83,195 | $345,745 | $325,270 | $1,292,582 | $1,820,300 | $96,787 | ||
S&P 500 | $185,615 | $174,924 | $210,843 | $787,260 | $981,593 | $3,851,950 | $6,746,002 | $592,684 | ||
Top 20 % of S&P 500 | 50.86 % | 46.85 % | 39.46 % | 43.92 % | 33.14 % | 33.56 % | 26.98 % | 16.33 % | ||
Gross values are not adjusted for float |
S&P Dow Jones Indices | ||||
S&P 500 Q3 2023 Buyback Report | ||||
SECTOR | DIVIDEND | BUYBACK | COMBINED | |
YIELD | YIELD | YIELD | ||
Consumer Discretionary | 0.80 % | 1.80 % | 2.59 % | |
Consumer Staples | 2.79 % | 0.99 % | 3.78 % | |
Energy | 3.54 % | 4.69 % | 8.23 % | |
Financials | 1.89 % | 2.83 % | 4.71 % | |
HealthCare | 1.77 % | 1.55 % | 3.32 % | |
Industrials | 1.70 % | 1.98 % | 3.68 % | |
Information Technology | 0.80 % | 1.70 % | 2.51 % | |
Materials | 2.09 % | 2.03 % | 4.12 % | |
Real Estate | 3.63 % | 0.23 % | 3.86 % | |
Communications Services | 1.06 % | 4.70 % | 5.75 % | |
Utilities | 3.51 % | 0.22 % | 3.73 % | |
S&P 500 | 1.57 % | 2.08 % | 3.65 % | |
Uses full values (unadjusted for float) | ||||
Dividends based on indicated; buybacks based on the last 12-months ending Q3,'23 |
Share Count Changes | ||
(Y/Y diluted shares used for EPS) | >=4% |