Not surprisingly, Apple Inc. (NASDAQ:AAPL) leads all stocks by spending the most money buying back its own shares
SmallCapPower | April 1, 2020: S&P Dow Jones Indices announced recently preliminary Q4 2019 stock buyback data for S&P 500 companies, which showed a 3.2% increase over Q3 but was down 18.6% year over year from Q4 2018’s record US$223.0 billion. Company share buybacks have long been controversial, as by reducing total shares outstanding it will boost earnings per share without having to actually grow earnings. And, this will often help a company’s stock price, a metric tied to executive compensation. A big question on investors’ minds should be, can stock prices keep rising if stock buybacks continue to fall year over year? Today we have found five stocks with the largest quarterly share buybacks during the most-recently reported quarter (Q4 2019).
*Returns are based on closing stock prices as of March 31, 2020
Apple Inc. (NASDAQ:AAPL) – $254.29
Apple is arguably the world’s most influential provider of consumer electronics with its iPhone, iPad, iPhone, iPad, Mac, Apple Watch and Apple TV products. On January 28, 2020, AAPL reported Q1 2020 earnings per diluted share of $4.99, up 19% from a year earlier. The Company continues to lead in share buybacks, spending $22.1 billion in Q4 2019, third most in S&P 500 history, and up 25.2% from its Q3 2019 $17.6 billion expenditure and more than double the $10.1 billion during Q4 2018. For the year, Apple has spent $81.7 billion on buybacks, up from 2018’s $74.2 billion. Over the five-year period, Apple Inc has spent $264.3 billion and $342.0 billion over the 10-year period.
- Year-to-Date Return: – 13%
Bank of America Corporation (NYSE:BAC) – $21.23
Bank of America is one of the world’s leading financial institutions, serving approximately 66 million consumer and small business clients. On January 15, 2020, BAC announced fourth-quarter 2019 diluted earnings per share that rose 6% to $0.74. The Company spent $7.7 billion on share buybacks for Q4 2019, up from $7.6 billion for Q3 2019; in 2019 they spent $28.1 billion, up from $20.1 billion in 2018.
- Year-to-Date Return: – 40%
Oracle Corporation (NYSE:ORCL) – $48.33
The Oracle Cloud offers a complete suite of integrated applications for Sales, Service, Marketing, Human Resources, Finance, Supply Chain and Manufacturing, plus Highly-Automated and Secure Generation 2 Infrastructure featuring the Oracle Autonomous Database. On March 12, 2020, ORCL reported Q3 FY2020 GAAP EPS that rose 4% to $0.79. The Company’s stock buybacks totaled $5.0 billion for Q4 2019, down from $5.5 billion in Q3 2019; 2019 was $26.9 billion down from $29.3 billion in 2018.
- Year-to-Date Return: – 8%
Wells Fargo & Company (NYSE:WFC) – $28.70
Wells Fargo is a financial services company with $1.9 trillion in assets. On January 14, 2020, WFC announced fourth-quarter 2019 diluted earnings per share that fell 50% to $0.60. The Company’s share buybacks totaled $7.4 billion for Q4 2019, down from its $7.5 billion Q3 2019 expenditure; 2019 was $24.8 billion, up from $21.0 billion for 2018.
- Year-to-Date Return: – 46%
JPMorgan Chase & Co. (NYSE:JPM) – $90.03
JPMorgan is a global financial services firm with assets of $2.7 trillion, providing investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management services. On January 14, 2020, JPM reported fourth-quarter 2019 earnings per share that increased 30% to $2.57. The Company’s stock buybacks totaled $6.8 billion for Q4 2019, down from the $6.9 billion spent in Q3 2019; 2019 was $24.0 billion, up from $20.0 billion for 2018.
- Year-to-Date Return: – 35%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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