S&P 500 Buybacks Decline 4.0% but Energy Buybacks increase 64.5%; Proforma Buyback Tax Would Have Reduced Operating Earnings by 0.46%

Rhea-AI Summary

S&P Dow Jones Indices reported preliminary Q3 2022 buybacks for the S&P 500 at $210.8 billion, down 4.0% from $219.6 billion in Q2 2022 and 10.1% from $234.6 billion in Q3 2021. 319 companies executed buybacks, a decrease from 331 in Q2 2022. Financials rose 8.5% from Q2, but were 62.8% lower than Q3 2021. Energy saw a significant increase of 64.5% from Q2. Q3 dividends declined 0.2% to $140.3 billion, while total returns fell 2.5% to $351.2 billion.

Positive

• Energy sector buybacks increased by 640% year-over-year to $22.0 billion.
• Total shareholder returns over the 12-months reached a record $1.534 trillion, up from $1.241 trillion in 2021.

Negative

• Overall buyback expenditures decreased by 10.1% year-over-year.
• Financials sector buybacks dropped by 62.8% compared to Q3 2021.

• S&P 500 Q3 2022 buybacks were $210.8 billion, down 4.0% from Q2 2022's $219.6 billion, as participation declined
• Financials increased 8.5% from Q2, but remained down 62.8% from Q3 2021, as Energy went up 64.5% from Q2 and up 640% from Q3 2021
• On a proforma basis, the new net buyback 1% excise tax, which starts in 2023, would have reduced Q3 2022 operating earnings by 0.46%

NEW YORK, Dec. 19, 2022 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI") announced today preliminary S&P 500^® stock buybacks, or share repurchases, data for Q3 2022.

Historical data on S&P 500 buybacks are available at www.spdji.com/indices/equity/sp-500.

Key Takeaways:

• Q3 2022 share repurchases were $210.8 billion, down 4.0% from Q2 2022's $219.6 billion expenditure and down 10.1% from Q3 2021's $234.6 billion.
• 319 companies reported buybacks of at least $5 million for the quarter, down from 331 in Q2 2022 and up from 309 in Q3 2021; 384 companies did some buybacks for the quarter, the same as in Q2 2022 and up from 371 in Q3 2021; 441 companies did some buybacks for the 12-months ending September 2022, up from 424 in the prior 2021 period.
• Buybacks remained top heavy with the top 20 companies accounting for 49.0% of Q3 2022 buybacks, an increase from Q2 2022's 46.8%, but down from the 53.8% in Q3 2021, and up from the pre-COVID historical average of 44.5%.
• For the 12-months ending September 2022, buybacks were $981.6 billion, down from the record $1.005 trillion posted for the June 2022 period, and up from the $742.2 billion spent in the September 2021 time period.
• 21.2% of companies reduced share counts used for earnings-per-share (EPS) by at least 4% year-over-year, up from Q2 2022's 19.8% and Q3 2021's 7.4%, and down from the pre-COVID Q3 2019 rate of 22.8%.
• S&P 500 Q3 2022 dividends decreased 0.2% to $140.3 billion from Q2 2022's record $140.6 billion and were 7.9% greater than the $130.0 billion in Q3 2021. For the 12-months ending September 2022, dividends were a record $552.4 billion, up 10.7% on an aggregate basis from the 12-month's September 2021's $498.9 billion.
• Total shareholders return of buybacks and dividends declined to $351.2 billion in Q3 2022, down 2.5% from Q2 2022's $360.2 billion and down 3.7% from Q3 2021's $364.7 billion.
• Total shareholder returns for the 12-months ending September 2022 increased to a record $1.534 trillion from the September 2021 $1.241 trillion.
• On a proforma basis, the new 1% excise tax on net buybacks, which will start in 2023, would have reduced the Q3 2022 S&P 500 operating earnings by 0.46% and as reported GAAP earnings by 0.52%; for 2021 it would have reduced operating by 0.45% and as reported GAAP by 0.47%.

"Companies, led by Financials, continued to pull back from their Q1 record-breaking buyback expenditures. However, energy has reentered the market at a time when the sector's shares are up substantially for the year," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. "The math of lower stock prices has resulted in more shares repurchased with 21.2% of the companies in the S&P 500 increasing their earnings-per-share by at least 4% thanks to their newly lowered share counts. The impact is expected to increase in Q4 2022 as companies appear to have accelerated their buybacks from Q1 2023 to Q4 2022 to avoid the new buyback tax."

1% Buyback Excise Tax for 2023:

On a proforma basis, the new 1% excise tax on net buybacks would have reduced Q3 2022 operating earnings by 0.46%, down from the proforma 0.48% for Q3 2021, with as reported GAAP earnings being reduced by 0.52%, up from the proforma 0.50% for Q3 2021. For the proforma 12-months period ending in September 2022, the tax would have cost S&P 500 companies $9.0 billion, and would have reduced operating earnings by 0.53% and as reported GAAP earnings by 0.57%.

Silverblatt added: "While going from zero to anything is the biggest increase, the 1% tax is an additional cost, but it is still not significant enough to impact overall buybacks at this point. However, some buybacks planned for 2023 appear to have been moved into Q4 2022. The buyback tax had bipartisan support, so there is a good possibility that the 1% level is only the opening rate, which if increased enough could shift some of the shareholder returns to dividends."

Q3 2022 GICS® Sector Analysis:

Information Technology continued to lead in buybacks, as its percentage of buybacks and aggregate expenditures decreased. In Q3 2022, IT's share decreased to 28.8% of all S&P 500 buybacks compared to Q2 2022's 32.8% and Q3 2021's 28.2%, as expenditures decreased (15.5%) to $60.8 billion from the prior quarter's $72.0 billion and were 8.0% lower than the Q3 2021 expenditure of $66.1 billion. For the 12-months ending September 2022, the sector spent $279.2 billion, representing 28.4% of all S&P buybacks, compared to the 2021 12-month $241.3 billion expenditure, which represented 32.5% of all buybacks. For the 10-years, the sector spent $1.857 trillion, representing 29.0% of the expenditures.

Financials increased their buybacks after last quarter's significant pull back, as their Q3 2022 expenditures increased 8.5% to $23.0 billion, representing 10.9% of the buybacks, from the Q2 2022 $21.2 billion, which represented 9.7% of all buybacks, but was 62.8% less than their Q3 2021 expenditure of $61.9 billion.

Energy continued to increase their buybacks, as they increased their expenditures by 64.5% for the quarter, to $22.0 billion (on a sector basis, second only to its Q4 2007 $25.3 billion expenditure), from the prior quarter's $13.4 billion and were up 640% from the Q3 2021 $3.0 billion. For the 12-months, buybacks were $51.6 billion compared to the prior period's $5.4 billion, an 853% increase.

Health Care buybacks increased 17.2% (after decreasing 58.2% last quarter), spending $20.2 billion in Q3 2022, representing 9.6% of all buybacks, up from the Q2 2022 $17.2 billion, which accounted for 7.8% of the buybacks, and were 24.6% higher than the Q3 2021 expenditure of $16.2 billion.

Issues:

The five issues with the highest total buybacks for Q3 2022 are:

• Apple (AAPL): continued to be the poster child for buybacks as it once again spent the most of any issue, with its Q3 2022 expenditure ranking as the third highest in S&P 500 history. For the quarter, the company spent $24.7 billion, up 0.7% from Q2 2022's $24.6 billion. Apple holds 18 of the top 20 record quarters (Meta Platforms holds #11 and QUALCOMM holds #12). For the 12-months ending September 2022, Apple spent $95.6 billion on buybacks, up from the prior 12-month's $92.5 billion. Over the five-year period, they have spent $409.1 billion and $582.0 billion over the ten-year period.
• Alphabet (GOOG/L): was next with $15.4 billion for Q3 2022, up from $15.2 billion in Q2 2022; the 12-month September 2022 expenditure was $57.4 billion versus the 12-month September 2021 expenditure of $44.7 billion.
• Meta Platforms (META): $7.4 billion for Q3 2022, up from $6.2 billion in Q2 2022; the 12-month September 2022 expenditure was $45.6 billion versus $31.5 billion.
• Microsoft (MSFT): $5.6 billion for Q3 2022, down from $8.8 billion in Q2 2022; the 12-month September 2022 expenditure was $30.6 billion versus $28.3 billion.
• Exxon Mobile (XOM): returning to the top five for the first time since Q3 2014, the former poster child of buybacks spent $4.5 billion in Q3 2022, up from $3.9 billion in Q2 2022 and nothing in Q3 2021; the 12-month September 2022 expenditure was $10.6 billion versus $0.1 billion.

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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,'22 Prelim.	$30,119	$1,716.39	$1,577.81	$552.40	$981.59	1.83 %	3.26 %	5.09 %
12 Mo Sep,'21	$36,538	$1,604.21	$1,483.50	$498.95	$742.21	1.37 %	2.03 %	3.40 %
2021	$40,356	$1,738.62	$1,652.78	$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 %
9/30/2022 Prelim.	$30,119	$423.86	$372.20	$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 %
6/28/2019	$24,423	$333.26	$290.00	$118.68	$165.46	1.93 %	3.27 %	5.20 %
3/29/2019	$23,619	$316.56	$291.82	$117.33	$205.81	1.97 %	3.49 %	5.45 %
12/31/2018	$21,027	$293.82	$242.91	$119.81	$222.98	2.17 %	3.84 %	6.01 %
9/30/2018	$24,579	$349.04	$306.70	$115.72	$203.76	1.81 %	2.93 %	4.75 %

    

S&P Dow Jones Indices
S&P 500 SECTOR BUYBACKS
SECTOR $ MILLIONS	Q3,'22	Q2,'22	Q3,'21	12MoSep,'22	12MoSep,'21	5-YEARS	10-YEARS
Consumer Discretionary	$19,542	$27,639	$20,553	$106,308	$64,528	$367,413	$778,679
Consumer Staples	$11,316	$10,662	$8,337	$43,213	$35,599	$167,612	$393,701
Energy	$22,014	$13,383	$2,974	$51,563	$5,410	$115,340	$234,190
Financials	$23,027	$21,216	$61,927	$150,447	$152,693	$732,867	$1,167,286
Healthcare	$20,152	$17,201	$16,170	$100,327	$69,336	$417,096	$757,813
Industrials	$17,113	$17,834	$17,567	$75,960	$53,241	$305,788	$636,115
Information Technology	$60,771	$71,956	$66,060	$279,174	$241,262	$1,205,391	$1,857,180
Materials	$5,678	$8,726	$5,252	$31,082	$16,534	$85,303	$152,772
Real Estate	$793	$1,127	$272	$3,696	$1,473	$14,411	$17,700
Communication Services	$30,297	$29,441	$35,230	$137,113	$100,860	$361,276	$390,032
Utilities	$140	$453	$299	$2,710	$1,272	$12,590	$18,598
TOTAL	$210,843	$219,637	$234,640	$981,593	$742,209	$3,785,087	$6,404,065
SECTOR BUYBACK MAKEUP %	Q3,'22	Q2,'22	Q3,'21	12MoSep,'22	12MoSep,'21	5-YEARS	10-YEARS
Consumer Discretionary	9.27 %	12.58 %	8.76 %	10.83 %	8.69 %	9.71 %	12.16 %
Consumer Staples	5.37 %	4.85 %	3.55 %	4.40 %	4.80 %	4.43 %	6.15 %
Energy	10.44 %	6.09 %	1.27 %	5.25 %	0.73 %	3.05 %	3.66 %
Financials	10.92 %	9.66 %	26.39 %	15.33 %	20.57 %	19.36 %	18.23 %
Healthcare	9.56 %	7.83 %	6.89 %	10.22 %	9.34 %	11.02 %	11.83 %
Industrials	8.12 %	8.12 %	7.49 %	7.74 %	7.17 %	8.08 %	9.93 %
Information Technology	28.82 %	32.76 %	28.15 %	28.44 %	32.51 %	31.85 %	29.00 %
Materials	2.69 %	3.97 %	2.24 %	3.17 %	2.23 %	2.25 %	2.39 %
Real Estate	0.38 %	0.51 %	0.12 %	0.38 %	0.20 %	0.38 %	0.28 %
Communication Services	14.37 %	13.40 %	15.01 %	13.97 %	13.59 %	9.54 %	6.09 %
Utilities	0.07 %	0.21 %	0.13 %	0.28 %	0.17 %	0.33 %	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 2022 BUYBACKS, $ MILLIONS
Company	Ticker	Sector	Q3 2022	Q2 2021	Q3 20221	12-Months	12-Months	5-Year	10-Year	Indicated
			Buybacks	Buybacks	Buybacks	Sep,'22	Sep,'21	Buybacks	Buybacks	Dividend
			$ Million	$ Million	$ Million	$ Million	$ Million	$ Million	$ Million	$ Million
Apple	AAPL	Information Technology	$24,736	$24,562	$20,449	$95,625	$92,527	$409,123	$582,041	$13,898
Alphabet	GOOGL	Communication Services	$15,392	$15,197	$12,610	$57,362	$44,705	$154,884	$163,102	$0
Meta Platforms	META	Communication Services	$7,365	$6,235	$15,033	$45,600	$31,532	$108,389	$115,597	$0
Microsoft	MSFT	Information Technology	$5,573	$8,757	$7,684	$30,585	$28,326	$116,316	$172,130	$20,285
Exxon Mobil	XOM	Energy	$4,494	$3,919	$0	$10,634	$101	$12,492	$52,459	$15,170
Procter & Gamble	PG	Consumer Staples	$4,000	$1,250	$2,750	$11,253	$11,759	$41,922	$64,291	$8,722
Lowe's Companies	LOW	Consumer Discretionary	$3,999	$4,091	$2,825	$16,140	$12,442	$37,598	$56,537	$2,684
Marathon Petroleum	MPC	Energy	$3,908	$0	$928	$9,496	$1,912	$16,395	$24,603	$1,496
NVIDIA	NVDA	Information Technology	$3,779	$3,650	$439	$10,579	$1,508	$16,000	$20,789	$401
Chevron	CVX	Energy	$3,697	$1,689	$618	$5,386	$618	$12,124	$22,210	$10,229
Comcast	CMCSA	Communication Services	$3,525	$3,065	$1,660	$11,868	$2,722	$22,066	$45,381	$4,756
Cigna	CI	Health Care	$3,500	$1,006	$2,611	$7,295	$8,011	$20,751	$26,260	$1,367
Walmart	WMT	Consumer Staples	$2,961	$3,339	$2,168	$11,127	$8,807	$35,887	$65,594	$3,193
ConocoPhillips	COP	Energy	$2,804	$2,300	$1,243	$7,928	$2,390	$18,500	$20,690	$2,597
Morgan Stanley	MS	Financials	$2,608	$2,837	$3,628	$11,973	$9,278	$35,895	$47,763	$4,151
S&P Global	SPGI	Financials	$2,512	$1,508	$10	$11,091	$60	$15,557	$19,970	$1,158
Charter Commun	CHTR	Communication Services	$2,225	$3,687	$3,666	$13,842	$15,183	$51,132	$60,521	$0
Johnson & Johnson	JNJ	Health Care	$2,165	$973	$391	$5,711	$2,781	$24,821	$55,373	$11,884
Visa	V	Information Technology	$2,106	$2,434	$2,969	$11,709	$8,820	$44,807	$71,674	$2,943
Union Pacific	UNP	Industrials	$2,024	$290	$1,361	$6,942	$6,595	$31,653	$46,843	$3,247
Top 20			$103,373	$90,789	$83,043	$392,146	$290,077	$1,226,312	$1,733,828	$108,182
S&P 500			$210,843	$219,637	$234,640	$981,593	$742,209	$3,785,087	$6,404,065	$568,648
Top 20 % of S&P 500			49.03 %	41.34 %	35.39 %	39.95 %	39.08 %	32.40 %	27.07 %	19.02 %
Gross values are not adjusted for float

 

S&P Dow Jones Indices
S&P 500 Q3 2022 Buyback Report
SECTOR	DIVIDEND	BUYBACK	COMBINED
	YIELD	YIELD	YIELD
Consumer Discretionary	1.03 %	3.17 %	4.20 %
Consumer Staples	2.56 %	1.87 %	4.43 %
Energy	3.66 %	3.26 %	6.92 %
Financials	2.14 %	4.00 %	6.14 %
HealthCare	1.60 %	1.93 %	3.53 %
Industrials	1.69 %	2.70 %	4.39 %
Information Technology	1.12 %	3.20 %	4.32 %
Materials	2.06 %	3.46 %	5.52 %
Real Estate	3.38 %	0.41 %	3.79 %
Communications Services	1.40 %	7.01 %	8.41 %
Utilities	3.00 %	0.27 %	3.27 %
S&P 500	1.75 %	3.02 %	4.76 %
Uses full values (unadjusted for float)
Dividends based on indicated; buybacks based on the last 12-months ending Q3,'22

 

Share Count Changes
(Y/Y diluted shares used for EPS)	>=4%	<=-4%
Q3 2022	7.21 %	21.24 %
Q2 2022	8.42 %	19.84 %
Q1 2022	7.62 %	17.64 %
Q4 2021	10.06 %	14.89 %
Q3 2021	10.22 %	7.41 %
Q2 2021	11.02 %	5.41 %
Q1 2021	10.40 %	5.80 %
Q4 2020	9.02 %	6.01 %
Q3 2020	8.62 %	9.62 %
Q2 2020	8.60 %	17.80 %
Q1 2020	8.00 %	19.60 %
Q4 2019	7.63 %	20.68 %
Q3 2019	8.62 %	22.85 %

ABOUT S&P DOW JONES INDICES

S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P Dow Jones Indices has been innovating and developing indices across the spectrum of asset classes helping to define the way investors measure and trade the markets.

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FAQ

What were the total S&P 500 buybacks in Q3 2022?

S&P 500 buybacks totaled $210.8 billion in Q3 2022.

How did S&P 500 dividends perform in Q3 2022?

Dividends decreased by 0.2% to $140.3 billion in Q3 2022.

What impact did the new buyback tax have on Q3 2022 earnings?

The new 1% excise tax on net buybacks would have reduced Q3 2022 operating earnings by 0.46%.

Which sector spent the most on buybacks in Q3 2022?

The Information Technology sector led with $60.8 billion in buybacks.

How did buybacks in Q3 2022 compare to Q3 2021?

Buybacks in Q3 2022 decreased by 10.1% compared to Q3 2021.