Research firm FactSet published a report on Tuesday, March 17th highlighting that stock buybacks among S&P 500 firms were down for the first time in a couple of years, and that Apple’s $6.1 billion in share buybacks was the most by any company in the fourth quarter of 2014.
Of note, there were $125.8 billion in aggregate share buybacks in the fourth quarter. This was year-over-year decrease of around 4.4%, and a quarter-over-quarter drop off of 13.5%. This was the first time we have seen a year-over-year decrease in buybacks by S&P 500 forms since the third quarter of 2012 (-26.8%).
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Buybacks by S&P 500 firms came to $564.7 billion on a trailing 12-month basis. This reflects a year-over-year bump up of 17.6% relative to the prior 12-month period. Moreover, the fourth quarter of 2014 was the fifth highest quarter for spending on buybacks on a trailing 12-month basis since 2005, behind the fourth quarter of 2007 ($618.0 billion), the third quarter of 2007 ($603.3 billion), the first quarter of 2008 ($593.6 billion), and the third quarter of 2014 ($569.9 billion).
Apple: More on 4Q 2014 share buybacks
Apple spent the most on buybacks in the S&P 500 in the fourth quarter. The company spent $6.1 billion in share repurchases, a 19.9% jump on a year-over-year basis. On a quarter-over-quarter basis, it was, however, a 64% decrease. In the third quarter of 2014, Apple spent the second-largest dollar amount on share repurchases by a S&P 500 firm since 2005 at $17.0 billion. From Q1 2014 to Q3 2014, Apple spent $16.9 billion on share repurchases on average. This means that on a trailing 12-month basis (TTM), the iPhone maker’s $57 billion is the most of all the companies in the index.
A few other firms had even larger dollar-level increases in spending on buybacks than Apple, including Intel at +$3.5 billion, Johnson & Johnson at +$2.3 billion, Wells Fargo at +$1.9 billion and Yahoo! at +$1.9 billion.
Several other firms reported large year-over-year declines in spending on buybacks in the fourth quarter. These firms include IBM at -$5.9 billion, Pfizer at -$3.9 billion, Cisco Systems at -$2.8 billion, General Electric at -$2.2 billion and AT&T at-$1.9 billion.
A total of 362 companies (72% of the index) participated in share buybacks in the fourth quarter of 2014. Of note, the average participation rate for the last five years for the S&P 500 has also been 72%. On a year-over-year basis, the number of firms that undertook share repurchases dropped by 6%.
Sector level share buyback breakdown
Taking a look at the sector level, seven of the 10 sectors in the S&P 500 reported a year-over-year decline in share repurchases, with the Telecom Services sector leading the way. The Utilities sector, on the other hand, saw the biggest increase in share repurchases in the fourth quarter.