Long-term investors have generally been a fan of stock buybacks and dividends. After all, dividends can account for about half of all shareholder returns over time. And buybacks can help to shrink the number of shares or limit dilution from stock options and acquisitions.
The effort of companies using their dollars to repurchase stock has been monumental over the past decade. Healthy companies could take advantage of the recession’s pressure on their shares to make their earnings per share that much stronger. They could also use that cash to keep their shares from falling even lower. Ultimately, companies spending the most on stock buybacks are believed to be stronger than companies that do not.
The companies that make up the S&P 500 spent a total of $132.63 billion buying back stock in the first quarter of 2017, according to Standard & Poor’s data. Of those, the top 20 buybacks were $55.875 billion. That is over 42% of the entire S&P 500 index buybacks generated by just 4% of the companies.
While these numbers are massive, S&P showed that the total allocations for buybacks and dividends among the S&P 500 companies were actually lower during the first quarter of 2017 than in prior periods. The stock market has risen and risen to all-time highs each month. Companies may have decided not to chase up their shares, and perhaps they are building up cash or waiting to see if the tax cuts and repatriation efforts will play out. The end result here is that companies may be getting smarter about their capital allocations and about returning capital to shareholders.
All data is after the most recent quarterly reporting period, which implies by the end of March 31, 2017. S&P provided comprehensive buyback history of the past year, five years and 10 years as a barometer. Some companies had outspent others on this list over time, but some of the larger buybacks of the past decade will not appear here as their buybacks were not ranked in the top 20 by dollars spent during the first quarter.
24/7 Wall St. has included the market cap for each company as a reference for how great these buybacks are in the grand scheme of things. Also included are recent trading data and the consensus analyst price targets from Thomson Reuters.
These are the top 20 stock buybacks in dollars spent during the first quarter of 2017 of all S&P 500 companies.
Apple Inc. (NASDAQ: AAPL) is the king of buybacks, buying back $7.161 billion worth of stock in the first quarter and a whopping $34.204 billion in the trailing 12-month period. Apple has now spent some $150.847 billion in the past five years.
Trading at $145.35 today, Apple currently has a market cap of $758 billion. Its 52-week trading range is $91.50 to $156.65 and its consensus analyst target price is $157.58.
Pfizer Inc. (NYSE: PFE) was the second largest of all buybacks in the S&P 500 in the quarter, and that makes it the number-one pharma and health care buyback giant. Pfizer spent $5.0 billion in the first quarter, the same as the trailing 12-month period, and that is $42.7 billion spent in the past five years and $57.27 billion over the past decade.
Shares of Pfizer were last seen at $34.21. The company has a market cap of $204 billion. The 52-week range is $29.83 to $37.39 and the consensus target price is $37.35.
CVS Health Corp. (NYSE: CVS) was a surprise to see as the third largest in buybacks in the first quarter of 2017. It spent $3.621 billion on buybacks and that came to a sum of $6.016 billion over the past 12-month period. CVS has now spent $23.4 billion on buybacks in the past five years and $36.1 billion in the past 10.
CVS recently traded at $77.66. The stock has a 52-week range of $69.30 to $98.66, and its consensus target price is $87.08. It currently has a total addressable market cap of $79 billion.
American International Group Inc. (NYSE: AIG) led the financial sector with buybacks, and that made it the fourth largest share buyback of the S&P 500. It spent $3.585 billion in the first quarter, for a total of$11.559 billion over the trailing 12-month period. AIG has now spent $41.2 billion in the past five years and $48.3 billion in the past 10 years for its stock buybacks.
Shares of AIG were at $62.99, with a consensus price target of $68.64 and a 52-week range of $48.41 to $67.47. The market cap is $58 billion.