Jun 25, 2019

Apple doubles down on buybacks

Dion Rabouin, author of Markets
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Data: S&P Global; Chart: Harry Stevens/Axios

Apple again led S&P 500 companies in buybacks, spending a new record $23.8 billion in Q1, more than doubling its spend from the previous quarter, data from S&P Global shows.

Context: Apple has long been a buyback behemoth. The company holds 8 of the 10 all-time records for quarterly buybacks, and has spent more than $75 billion on buybacks over just the past year.

  • It has spent $234.7 billion over the most recent 5-year period, and $284.3 billion over the last 10-year period.
  • Apple accounted for 23% of share buybacks made by the top 20 S&P 500 companies.

The big picture: While Apple has increased its buyback spending, other S&P 500 companies have slowed from 2018's record pace.

  • Companies bought back just $205.8 billion worth of their own shares, a 7.7% decline from Q4 2018, S&P reported. That ended the streak of 4 consecutive quarters of record buybacks.

Yes, but: Buybacks rose 8.9% from Q1 2018, which set a record at the time.

  • Outside analysis of the broader stock market, beyond just the S&P, shows announced buyback spending was higher in Q1 2019 than Q4 2018.

What they're saying: Ratings agency Moody's warned last month that companies are spending more on share buybacks and dividends than they were paying in taxes before the 2017 tax cut. The tax savings "can be wiped out entirely by even a modest change in share buybacks," Christina Padgett, senior vice president at Moody's, told Axios at the time.

  • S&P 500 companies, at least, may be heeding the warning.

Go deeper: Apple needs a next act

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Photo: Avalon/Universal Images Group via Getty Images)

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