S&P 500 Q4 2024 Buybacks Increase 7.4% and 2024 Expenditure Sets New Record by Increasing 18.5%; Earnings Per Share Increases from Buybacks Decline for the Quarter, as Q1 2025's Impact is Expected to Increase

Rhea-AI Summary

S&P 500 companies set a new annual record for stock buybacks in 2024, reaching $942.5 billion, an 18.5% increase from 2023's $795.2 billion. Q4 2024 buybacks totaled $243.2 billion, up 7.4% from Q3 and 11.0% from Q4 2023.

The top 20 companies accounted for 49.0% of Q4 buybacks, with Apple leading at $26.5 billion. Total shareholder returns, including dividends, hit a record $410.8 billion in Q4 2024. The 1% buyback tax had minimal impact, reducing Q4 operating earnings by 0.37%.

By sector, Information Technology led with 26.2% of all buybacks, while Consumer Staples showed the largest increase, up 97.9%. 342 companies reported buybacks of at least $5 million in Q4, up from 332 in Q3 2024.

Positive

• Record annual buybacks of $942.5 billion in 2024, up 18.5% YoY
• Q4 buybacks increased 7.4% QoQ to $243.2 billion
• Record dividend payments of $629.6 billion in 2024, up 7.0% YoY
• Increased participation with 342 companies reporting buybacks, up from 332 in Q3
• Consumer Staples sector buybacks surged 97.9% QoQ

Negative

• Lower EPS impact from buybacks due to higher stock prices
• Potential increase in buyback tax rate could affect future corporate spending
• Decreased buyback efficiency as higher stock prices resulted in fewer shares purchased
• Financial sector reduced buybacks by 4.4% QoQ
• Communication Services reduced spending by 14.0%

Insights

Financial Analyst

The record-setting $942.5 billion in S&P 500 buybacks for 2024 (18.5% increase year-over-year) represents significant corporate capital allocation activity and shareholder returns. This data from S&P Dow Jones Indices, a division of S&P Global Inc. (SPGI), highlights several key trends worth noting.

The concentration of buyback activity remains substantial but slightly decreased, with the top 20 companies accounting for 49.0% of Q4 2024 buybacks, down from 53.2% in Q3. Tech giants continue dominating individual buybacks, with Apple alone spending $104.2 billion in 2024, representing approximately 11% of all S&P 500 buybacks.

The quarterly acceleration trend is important - Q4 buybacks reached $243.2 billion, up 7.4% from Q3, indicating growing corporate confidence despite elevated market valuations. Combined with record dividend payments of $629.6 billion (up 7.0%), total shareholder returns reached an unprecedented $1.572 trillion in 2024.

The 1% buyback excise tax is having minimal impact on corporate behavior, reducing operating earnings by just 0.44% for 2024. However, the commentary suggesting potential tax rate increases to 2-2.5% could significantly alter the buyback landscape and potentially shift capital return strategies toward dividends.

For SPGI specifically, this robust buyback activity reinforces the value of their index and financial data services. As a provider of critical market intelligence, SPGI benefits from sustained corporate activity that drives demand for their analytics and benchmarking tools.

Market Strategist

The acceleration of buyback activity to record levels reveals important structural shifts in corporate capital deployment strategies. The $942.5 billion 2024 record comes despite significantly higher stock prices, indicating companies are willing to repurchase shares even at elevated valuations - a potential signal of management confidence in intrinsic value exceeding current market prices.

Sector rotation within buybacks is particularly telling. Consumer Staples' massive 97.9% increase in Q4 buybacks suggests defensive positioning, while Information Technology's continued dominance (26.9% of all 2024 buybacks) aligns with the sector's strong free cash flow generation. Financial sector buybacks declining 4.4% quarter-over-quarter may reflect caution amid uncertain interest rate trajectories.

The commentary regarding Q1 2025 showing increased buybacks as stock prices pulled back suggests an emerging opportunistic approach by corporate treasuries. This price sensitivity could create a market stabilization mechanism, with increased buybacks providing support during market corrections.

Most revealing is the EPS impact of these massive expenditures. Despite record spending, fewer companies reduced share counts by at least 4% year-over-year (11.9% in Q4 2024 vs. 13.6% in Q3), highlighting the diminishing returns of buybacks at elevated valuations - companies are spending more to achieve less EPS accretion.

For S&P Global, this trend underscores the value of their data services in tracking increasingly complex capital allocation strategies. As potential tax policy changes loom, market participants will increasingly rely on SPGI's analytics to understand and navigate the evolving shareholder return landscape.

• S&P 500 Q4 2024 buybacks were $243.2 billion, up 7.4% from Q3 2024's $226.6 billion and up 11.0% from Q4 2023's $219.1 billion
• The 2024 expenditure set an annual record of $942.5 billion and was up 18.5% from the 2023 expenditure of $795.2 billion 
• Consumer Staples increased spending by 97.9% as Financials and Communication Services reduced their spending by 4.4% and 14.0%, respectively 
• The net buyback 1% tax reduced Q4 2024 operating earnings by 0.37% and As Reported GAAP by 0.39%, as the year is 0.44% and 0.50%, respectively

NEW YORK, March 19, 2025 /PRNewswire/ -- S&P Dow Jones Indices (S&P DJI) today announced the preliminary S&P 500^® stock buybacks or share repurchases data for Q4 2024.

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

Key Highlights:

• Q4 2024 share repurchases were $243.2 billion, up 7.4% from Q3 2024's $226.6 billion expenditure, and up 11.0% from Q4 2023's $219.1 billion.
• For the full year 2024 buybacks set an annual record of $942.5 billion, up from $795.2 billion in 2023; the 12-month peak was in June 2022 with $1.005 trillion.
• 342 companies reported buybacks of at least $5 million for the quarter, up from 332 in Q3 2024 and up from 313 in Q4 2023; 399 companies did some buybacks for the quarter, up from 381 in Q3 2024 and up from 373 in Q4 2023; 435 companies did some buybacks in 2024, up from 429 in 2023.
• Buybacks remained top heavy as concentration decreased, with the top 20 S&P 500 companies accounting for 49.0% of Q4 2024 buybacks, down from Q3 2024's 53.2%, and above the historical average of 47.7% and the pre-COVID historical average of 44.5%.
• 11.9% of companies reduced share counts used for earnings per share (EPS) by at least 4% year-over-year, down from Q3 2024's 13.6% and down from Q4 2023's 12.6%; for Q4 2024 162 issues increased their shares used for EPS over Q3 2024 and 278 reduced them.
• S&P 500 Q4 2024 dividends increased 6.7% to a record $167.6 billion from Q3 2024's $157.0 billion, which held the previous record and were 8.7% greater than the $154.1 billion in Q4 2023.
• For 2024, dividends set a record $629.6 billion payments, up 7.0% on an aggregate basis from 2023's $588.2 billion.
• Total shareholders return of buybacks and dividends increased to a record $410.8 billion in Q4 2024, up 7.1% from Q3 2024's $389.3 billion and up 10.1% from Q4 2023's $373.2 billion.
• Total shareholder returns for 2024 increased 13.6% to a record $1.572 trillion from 2023's $1.383 trillion.
• The 1% tax on net buybacks, which started in 2023, reduced the Q4 2024 S&P 500 operating earnings by 0.37%, down from Q3 2024's 0.42%, as it reduced As Reported GAAP earnings by 0.39%, down from the prior 0.48%. For 2024, the 1% tax on net buybacks reduced earnings by 0.44% for operating and 0.50% for As Reported.

"After declining in 2023, companies have increased their buyback expenditure and set an annual record in 2024. The increased expenditures came as stock prices significantly increased and the upward impact on EPS via share-count-reduction fell, which resulted in fewer shares being purchased for the expenditure. For 2025, Q1 buybacks appear to have increased so far as stock prices have pulled back, with companies' stocking-up on issues needed for employee options and ahead of the current uncertainty over economic and political policies. The net change should be a greater positive impact on Q1 2025 EPS. After that, additional discretionary buybacks, not used for options, will be dependent on the market and public policies," said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices.

1% Buyback Excise Tax:

The 1% excise tax on net buybacks reduced Q4 2024 operating earnings by 0.37%, down from Q3 2024's 0.42% and down from the 0.44% for Q4 2023. The 2024 impact was 0.44%, up from 2023's 40%. The tax on As Reported GAAP earnings impact increased to 0.50% in 2024 from 2023's 0.47%.

Silverblatt added: "The 1% tax remains a manageable expense and has not impacted overall buybacks at this point. However, given the initial 1% buyback tax had bipartisan support and remains an attractive cash generator, there is an expectation that some increase or potential change to the type of buybacks that are taxed will remain on the table. Given the current corporate sensitivity to costs, a buyback tax rate of 2% to 2.5% was seen as impacting both buybacks and the EPS impact of share-count-reduction, which is already at a lower level due to higher stock prices. Under an increased tax, some of the expenditures may shift from buybacks to dividends. However, any shift was not seen as being on a-dollar-for-dollar basis as dividends remain a long-term pure cash-flow item which must be incorporated into corporate budgets."

Q4 2024 GICS® Sector Analysis:

Information Technology maintained its lead in buybacks, even as its expenditure's ticked down 0.4%, as it represented 26.2% of all buybacks for the quarter. Q4 2024 expenditures declined to $63.7 billion, compared to Q3 2024's $64.0 billion, and were up 13.3% from Q4 2023's $56.3 billion expenditure. For 2024, the sector increased its expenditure 28.0% to $253.4 billion representing 26.9% of all S&P 500 buybacks, compared to 2023's $197.9 billion which represented 24.9% of all buybacks.

Financials decreased buybacks by 4.4% for Q4 2024 as it collectively spent $42.1 billion on buybacks, accounting for 17.3% of all S&P 500 buybacks. This was down for the quarter compared to Q3 2024's expenditure of $44.1 billion, and up 43.2% from Q4 2023's $29.4 billion. For 2024, Financials spent $174.6 billion, up from $138.4 billion for 2023.

Healthcare increased its Q4 2024 expenditure by 56.2%, spending $26.4 billion, compared to the Q3 2024 expenditure of $16.9 billion, and was up 100% from Q4 2023's $13.2 billion expenditure. For 2024, the sector spent $87.7 billion, up from 2023's $64.7 billion.

Consumer Staples increased their spending in Q4 2024 by 97.9% to $15.3 billion, up from the prior quarter's $7.7 billion and up 69.3% from the Q4 2023 expenditure of $9.0 billion. For 2024, the sector spent $45.5 billion compared to 2023's $24.6 billion

Issues:

The five issues with the highest total buybacks for Q4 2024 were:

• Apple (AAPL): continued to dominate the issue level buybacks as it again spent the most of any issue with its Q4 2024 expenditure, ranking as the third highest in S&P 500 history. For the quarter, the company spent $26.5 billion up from Q3 2024's $25.4 billion. Apple holds 18 of the top 20 record quarters (Meta Platforms holds #17 and QUALCOMM holds #19). For 2024, Apple spent $104.2 billion on buybacks up from 2023's $83.9 billion. Over the five-year period, Apple has spent $452 billion, and $716 billion over the ten-year period.
• Alphabet (GOOG/L): $15.6 billion for Q4 2024 up from $15.3 billion in Q3 2024. The 2024 expenditure was $62.2 billion versus 2023's $61.5 billion.
• NVIDA (NVDA): $9.7 billion for Q4 2024 down from $12.7 billion in Q3 2024. The 2024 expenditure was $40.6 billion versus $12.3 billion.
• Exxon Mobil (XOM): $5.8 billion for Q4 2024 up from $5.5 billion in Q3 2024. The 2024 expenditure was $19.6 billion versus $17.7 billion.
• Kroger (KR): $5.0 billion for Q4 2024 (as the FTC blocked their merger with Albertsons) up from $9 million in Q3 2024. The 2024 expenditure was $5.2 billion versus $62 million.

For more information about S&P Dow Jones Indices, please visit  https://www.spglobal.com/spdji/en/.

 

S&P Dow Jones Indices
S&P 500 proforma net buyback tax impact
	TAX	TAX % OF	TAX % OF
	$ BILLIONS	OPERATING	AS REPORTED
2024	$8.41	0.44 %	0.50 %
12/31/2024	$1.93	0.37 %	0.39 %
9/30/2024	$2.11	0.42 %	0.48 %
6/30/2024	$2.20	0.45 %	0.49 %
3/31/2024	$2.18	0.47 %	0.54 %
2023	$7.24	0.40 %	0.45 %
2022 proforma	$8.47	0.51 %	0.58 %
2021 proforma	$7.93	0.45 %	0.47 %

 

S&P Dow Jones Indices
S&P 500 SECTOR BUYBACKS
SECTOR $ MILLIONS	Q4,'24	Q3,'24	Q4,'23	12MoDec,'24	12MoDec,'23	5-YEARS	10-YEARS
Consumer Discretionary	$21,863	$20,605	$28,716	$76,683	$83,490	$387,099	$790,766
Consumer Staples	$15,309	$7,734	$9,042	$45,507	$24,604	$176,408	$373,428
Energy	$17,477	$18,313	$16,060	$66,617	$69,850	$222,285	$300,185
Financials	$42,133	$44,054	$29,418	$174,560	$138,354	$755,867	$1,357,756
Healthcare	$26,402	$16,906	$13,188	$87,656	$64,750	$405,568	$800,972
Industrials	$20,733	$15,852	$27,112	$70,268	$68,222	$326,307	$664,959
Information Technology	$63,741	$63,981	$56,283	$253,369	$197,893	$1,227,549	$2,067,123
Materials	$4,732	$4,454	$2,963	$19,618	$15,168	$97,587	$154,344
Real Estate	$660	$204	$243	$2,212	$1,693	$12,304	$22,333
Communication Services	$29,084	$33,818	$34,715	$142,505	$127,903	$618,088	$670,066
Utilities	$1,109	$636	$1,353	$3,553	$3,237	$14,393	$23,025
TOTAL	$243,243	$226,557	$219,091	$942,549	$795,163	$4,243,455	$7,224,956
SECTOR BUYBACK MAKEUP %	Q4,'24	Q3,'24	Q4,'23	12MoDec,'24	12MoDec,'23	5-YEARS	10-YEARS
Consumer Discretionary	8.99 %	9.09 %	13.11 %	8.14 %	10.50 %	9.12 %	10.94 %
Consumer Staples	6.29 %	3.41 %	4.13 %	4.83 %	3.09 %	4.16 %	5.17 %
Energy	7.18 %	8.08 %	7.33 %	7.07 %	8.78 %	5.24 %	4.15 %
Financials	17.32 %	19.44 %	13.43 %	18.52 %	17.40 %	17.81 %	18.79 %
Healthcare	10.85 %	7.46 %	6.02 %	9.30 %	8.14 %	9.56 %	11.09 %
Industrials	8.52 %	7.00 %	12.37 %	7.46 %	8.58 %	7.69 %	9.20 %
Information Technology	26.20 %	28.24 %	25.69 %	26.88 %	24.89 %	28.93 %	28.61 %
Materials	1.95 %	1.97 %	1.35 %	2.08 %	1.91 %	2.30 %	2.14 %
Real Estate	0.27 %	0.09 %	0.11 %	0.23 %	0.21 %	0.29 %	0.31 %
Communication Services	11.96 %	14.93 %	15.85 %	15.12 %	16.09 %	14.57 %	9.27 %
Utilities	0.46 %	0.28 %	0.62 %	0.38 %	0.41 %	0.34 %	0.32 %
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 Q4 2024 BUYBACKS, $ MILLIONS
Company	Ticker	Sector	Q4 2024	Q3 2024	Q4 2023	12-Months	12-Months	5-Year	10-Year	Indicated
			Buybacks	Buybacks	Buybacks	Dec,'24	Dec,'23	Buybacks	Buybacks	Dividend
			$ Million	$ Million	$ Million	$ Million	$ Million	$ Million	$ Million	$ Million
Apple	AAPL	Information Technology	$26,527	$25,361	$22,730	$104,187	$83,920	$451,957	$716,297	$15,116
Alphabet	GOOGL	Communication Services	$15,551	$15,291	$16,191	$62,222	$61,504	$264,445	$302,235	$4,674
NVIDIA	NVDA	Information Technology	$9,673	$12,676	$3,500	$40,636	$12,316	$67,312	$73,497	$981
Exxon Mobil	XOM	Energy	$5,780	$5,512	$4,656	$19,629	$17,748	$53,092	$60,076	$17,405
Kroger	KR	Consumer Staples	$5,031	$9	$8	$5,156	$62	$9,182	$15,759	$852
Microsoft	MSFT	Information Technology	$4,986	$4,107	$4,000	$17,516	$20,044	$121,523	$199,072	$24,684
UnitedHealth Group	UNH	Health Care	$4,972	$956	$1,500	$9,000	$8,000	$33,250	$47,230	$7,730
T-Mobile	TMUS	Communication Services	$4,712	$596	$2,213	$11,497	$13,371	$48,402	$50,645	$1,716
General Motors	GM	Consumer Discretionary	$4,686	$1,032	$9,996	$7,064	$11,115	$20,679	$31,381	$660
Chevron	CVX	Energy	$4,509	$4,714	$3,397	$15,044	$14,678	$40,716	$45,263	$11,432
JPMorgan Chase	JPM	Financials	$4,301	$6,361	$2,275	$18,830	$9,824	$56,741	$130,833	$14,077
Visa	V	Financials	$4,246	$5,867	$3,752	$17,415	$12,756	$59,684	$94,536	$4,078
Wells Fargo	WFC	Financials	$4,000	$3,435	$2,350	$19,448	$11,851	$56,047	$129,454	$5,327
Meta Platforms	META	Communication Services	$3,857	$12,361	$8,165	$43,895	$26,786	$162,120	$189,974	$4,578
Bank of America	BAC	Financials	$3,535	$3,534	$811	$13,104	$4,576	$54,904	$123,442	$6,942
Mastercard	MA	Financials	$3,473	$2,935	$1,840	$11,213	$9,121	$39,888	$62,448	$2,492
Adobe	ADBE	Information Technology	$2,652	$2,668	$1,202	$10,177	$4,989	$30,634	$39,730	$0
Procter & Gamble	PG	Consumer Staples	$2,510	$1,939	$1,003	$6,952	$3,854	$38,721	$64,440	$9,491
Comcast	CMCSA	Communication Services	$2,183	$1,990	$3,521	$9,103	$11,291	$38,928	$62,289	$5,039
QUALCOMM	QCOM	Information Technology	$2,065	$1,438	$1,154	$5,964	$3,069	$19,927	$60,926	$3,777
Top 20			$119,249	$112,782	$94,264	$448,052	$340,875	$1,668,152	$2,499,527	$141,051
S&P 500			$243,243	$226,557	$219,091	$942,549	$795,163	$4,061,872	$7,224,956	$645,756
Top 20 % of S&P 500			49.02 %	49.78 %	43.02 %	47.54 %	42.87 %	41.07 %	34.60 %	21.84 %
Gross values are not adjusted for float

 

S&P Dow Jones Indices
S&P 500 Q4 2024 Buyback Report
SECTOR	DIVIDEND	BUYBACK	COMBINED
	YIELD	YIELD	YIELD
Consumer Discretionary	0.74 %	1.52 %	2.26 %
Consumer Staples	2.40 %	1.56 %	3.96 %
Energy	3.41 %	4.13 %	7.54 %
Financials	1.48 %	2.52 %	4.00 %
HealthCare	1.70 %	1.61 %	3.31 %
Industrials	1.41 %	1.71 %	3.12 %
Information Technology	0.67 %	1.71 %	2.37 %
Materials	1.98 %	1.98 %	3.97 %
Real Estate	3.39 %	0.20 %	3.59 %
Communications Services	1.02 %	3.72 %	4.74 %
Utilities	3.09 %	0.30 %	3.39 %
S&P 500	1.34 %	1.96 %	3.31 %
Uses full values (unadjusted for float)
Dividends based on indicated; buybacks based on the last 12-months ending Q4,'24

 

Share Count Changes
(Y/Y diluted shares used for EPS)	>=4%	<=-4%
Q4 2023	6.87 %	11.92 %
Q3 2024	5.01 %	13.63 %
Q2 2024	5.04 %	12.70 %
Q1 2024	4.62 %	13.25 %
Q4 2023	3.81 %	12.63 %
Q3 2023	4.60 %	13.80 %
Q2 2023	4.22 %	16.27 %
Q1 2023	4.02 %	18.47 %
Q4 2022	5.01 %	19.44 %
Q3 2022	7.21 %	21.24 %
Q2 2022	8.42 %	19.84 %
Q1 2022	7.62 %	17.64 %
Q4 2021	10.06 %	14.89 %

 

 

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.

S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit: https://www.spglobal.com/spdji/en/.

S&P Dow Jones Indices Media Contact: 
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alyssa.augustyn@spglobal.com

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Senior Index Analyst
(+1) 973 769 2306
howard.silverblatt@spglobal.com 

 

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FAQ

How much did S&P 500 companies spend on stock buybacks in Q4 2024?

S&P 500 companies spent $243.2 billion on buybacks in Q4 2024, up 7.4% from Q3 2024 and 11.0% from Q4 2023.

What was Apple's buyback spending in 2024?

Apple spent $104.2 billion on buybacks in 2024, up from $83.9 billion in 2023, with $26.5 billion spent in Q4 alone.

How did the 1% buyback tax affect S&P 500 earnings in 2024?

The 1% buyback tax reduced S&P 500 operating earnings by 0.44% and GAAP earnings by 0.50% in 2024.

Which sector led S&P 500 buybacks in Q4 2024?

Information Technology led with 26.2% of all buybacks, spending $63.7 billion in Q4 2024.

What was the total shareholder return for S&P 500 companies in 2024?

Total shareholder return reached a record $1.572 trillion in 2024, up 13.6% from 2023's $1.383 trillion.