Share buybacks building towards pre-recession highs

Over the third quarter, share buybacks within the S&P 500 amounted to $120 billion. While this was only the second consecutive quarter that quarterly buybacks have surpassed $100 billion, share repurchase activity is still below pre-recession levels. Prior to the Q2 2008, there was a string of nine consecutive quarters of buybacks above the $100 billion milestone.

Part of the appeal of share repurchases to corporations is the freedom to time cash outflows according to economic conditions, market valuations, and individual financial conditions, but is the current growth in buybacks an indication of increasing corporate confidence?

Not necessarily. Aggregate cash balances for the S&P 500 are up over 7.6% year-over-year, which shows companies continue to accumulate large amounts of cash on their balance sheets. Buybacks also have a long way to go before reaching their recent quarterly high of $176 billion in Q3 2007.

Read more about the current and historical share buyback activity at the company, sector, and index levels for the S&P 500 in this quarter's edition of FactSet Buyback Quarterly.

All of the data used to compile FactSet Buyback Quarterly is available in the FactSet workstation.