As if public enterprises didn’t learn their lesson the first time (see our earlier article, The Folly of Share Buybacks), we are again seeing stepped-up buyback activity. For the S&P 500, during their latest reporting quarter, the firms in aggregate bought back $80.8 billion in common and preferred stock versus $67 billion a year earlier, a greater than 20% increase. As of the latest reporting period, S&P firms in aggregate have reported the following:
Interesting how cash dividends have deceased as a whole. Bristol-Myers ($65 MM), Deere ($117 MM) and Goldman Sachs ($182 MM) were a few paying lower dividends. The fall in long term debt issuance is a reflection of the build in cash resulting from increased free cash flow.
Disclosure: No positions
Earlier Post: The Folly of Share Buybacks
Kenneth S. Hackel, C.F.A.
CT Capital LLC
For additional information on this type analysis, pre-order- “Security Valuation and Risk Analysis” out this fall from McGraw-Hill.