Tuesday, September 18, 2007

Stock Buybacks Accelerate In Second Quarter 2007

In the 2nd quarter of 2007 Standard & Poor's reports stock buyback activity continues at a record pace. As noted in the chart below, the combined amount of buybacks plus dividends exceeded reported earnings in the quarter. Howard Silverblatt, Senior Index Analyst at Standard & Poor's notes:
  • The record buyback activity was fueled by IBM’s landmark $15.7 billion stock buyback during the second quarter.
  • Large quarterly buybacks were also reported by Exxon Mobil at $7.6 billion and Microsoft at $7.2 billion.
  • Over the past eleven quarters, when the buyback bonanza started, S&P 500 issues have spent approximately $1.12 trillion on stock buybacks compared to (a similar) $1.24 trillion on Capital Expenditures and $594 billion on dividends.
  • Standard & Poor’s also notes that the top-ten buyback issues accounted for 35% of all stock buybacks during the quarter with an aggregate amount of over $54 billion.

(click on chart for larger image)

stock buyback chart S&P 500 Index second quarter 2007
S&P 500 2nd Quarter Buyback Activity Sets Record at $158 Billion
Standard & Poor's
By: David R. Guarino & Howard Silverblatt
September 6, 2007

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