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2013 buybacks in the S&P 500 advance to pre-crisis highs

Dec 20, 2013

Aggregate share buybacks in the S&P 500 grew 32.0% year-over-year to $123.9 billion in Q3. While this represents a sequential decline of 0.1% from Q2, S&P 500 companies have been more active over the trailing year than in any period since the financial crisis. The trailing twelve-month sum of $448.1 billion is the highest since Q2 2008 ($526.9 billion).

The third quarter also marked the highest number of companies engaging in a buyback over a trailing twelve-month period (431, or 86%) since Q4 2008. Even though the number of dividend-payers in the S&P 500 index is at a 17 year high, this represented a higher number of companies than those paying a dividend (417).

Count of S&P 500 Companies by Capital Distribution Practice – Trailing Twelve-Month Basis

The rise in both dividend payers and companies engaging in buybacks has contributed to a trend where very few companies do not engage in either form of shareholder distribution. In fact, just 16 companies in the S&P 500 (3.2%) did not pay a dividend or engage in a share buyback over the trailing twelve-month period. As recently as Q1 2010, more than three times as many companies (49, or 9.8%) did not make either form of distribution. Concurrently, the number of companies engaging in both forms of shareholder distribution reached the highest level since at least 2005 (369, or 73.8%).

The companies that do not engage in buybacks or dividends are typically smaller than those in the other groups. But there are exceptions, including and Google. has cash and short-term investments amounting to nearly $8 billion, but its free cash flow (operating cash flow less fixed capital expenditures) was less than $0.4 billion over the trailing four quarters. Google, on the other hand, had free cash flow just shy of $12 billion over the trailing four quarters. The company also has cash and short-term investments of $57 billion, which grew 23.6% year-over-year.

Read more about the buyback activity of the S&P 500 companies and sectors in this quarter's edition of FactSet Buyback Quarterly. Visit to launch the report now.  

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