S&P 500 Q1 2023 Buybacks Again Tick up, As Sector Expenditures Shift; Buyback Tax Reduced Operating Earnings by 0.45%

  • S&P 500 Q1 2023 buybacks were $215.5 billion, up 2.1% from Q4 2022’s $211.2 billion and down 23.3% from the Q1 2022 $281.0 billion record, as the 12-month March 2023 expenditure of $857.2 billion was down from the $922.7 billion paid in fiscal 2022

  • Financials significantly increased to $46.9 billion, as the sector returned to the buyback market, and was higher than Information Technology’s $45.9 billion the first time since Q3 2017

  • Energy slightly decreased, spending $19.3 billion, representing 9.0% of all buybacks, whereas the sector represented 4.6% of the market value

  • The new net buyback 1% excise tax, which started in 2023, reduced Q1 2023 operating earnings by 0.45% and As Reported GAAP by 0.49%

NEW YORK, June 14, 2023 /PRNewswire/ — S&P Dow Jones Indices (“S&P DJI”) announced today preliminary S&P 500® stock buybacks, or share repurchases, data for Q1 2023.

Historical data on S&P 500 buybacks are available at www.spdji.com/indices/equity/sp-500.

Key Takeaways:

  • Q1 2023 share repurchases were $215.5 billion, up 2.1% from Q4 2022’s $211.2 billion expenditure and down 23.3% from the record Q1 2022’s $281.0 billion.

  • 358 companies reported buybacks of at least $5 million for the quarter, up from 318 in Q1 2022 and down from 374 in Q1 2022; 390 companies did some buybacks for the quarter, up from 385 in Q4 2022 and down from 395 in Q1 2022; 436 companies did some buybacks for the 12-months ending March 2023, up from 430 in the prior 2022 period.

  • Buybacks remained top heavy with the top 20 companies accounting for 48.6% of Q1 2023 buybacks, above the 45.7% of Q4 2022, above the historical average of 47.1%, and above the 42.1% level reported for Q1 2022; in addition, above the pre-COVID historical average of 44.5%.

  • For the 12-months ending March 2023, buybacks were $857.2 billion, down from the record fiscal $922.7 billion of 2022, down from the record 12-month June 2022 $1.005 trillion, the only 12-month trillion-dollar expenditure, and down from the 12-month March 2022 $984.6 billion.

  • 18.5% of companies reduced share counts used for earnings-per-share (EPS) by at least 4% year-over-year, down from Q4 2022’s 19.4% and up from Q1 2022’s 17.6%; for Q1 2023 165 issues increased their shares used for EPS over Q4 2022, and 270 reduced them.

  • S&P 500 Q1 2023 dividends increased 0.5% to a record $146.8 billion from the prior Q4 2022’s record of $146.1 billion and were 6.7% greater than the $137.6 billion in Q1 2022. For the 12-months ending in March 2023, dividends set a record $573.7 billion payment, up 9.3% on an aggregate basis from March 2022’s $524.9 billion.

  • Total shareholders return of buybacks and dividends increased to $362.3 billion in Q1 2023, up 1.4% from Q4 2022’s $357.3 billion and down 13.4% from Q1 2022’s $418.6 billion. Total shareholder returns for the 12-months ending March 2023 decreased to $1.431 trillion from the 12-month March 2022’s $1.510 trillion.

  • The new 1% excise tax on net buybacks, which started in 2023, reduced the Q1 2023 S&P 500 operating earnings by 0.45% and As Reported GAAP earnings by 0.49%, the proforma for full year 2022 was a 0.51% reduction for operating and a 0.58% reduction for as reported.

“Companies, led by Financials, pushed buybacks up slightly. If Financials had not returned to the buyback market, the 2.1% expenditure increase would have been a 10.6% decline, as 8 of the 11 sectors pulled back. While the year-to-date S&P 500 price increase was top-heavy, the Q1 2023 buyback market was Financial heavy. The EPS impact, due to share count reduction, also declined, as 18.5% of the issues increased their Q1 2023 EPS year-over-year by at least 4% compared to 19.4% last quarter,” said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. “Going forward and given the recent banking issues and the current regulatory reviews, banks may again pull back on buybacks to protect their dividends for what is expected to be a more difficult Fed stress test due to stricter and more extensive regulations.”

1% Buyback Excise Tax for 2023:

On a proforma basis, the new 1% excise tax on net buybacks reduced Q1 2023 operating earnings by 0.45%, down from proforma 0.46% for Q4 2022 and the proforma 2022 0.51%, with as reported GAAP earnings being reduced by 0.49%, down from the proforma 0.58% for Q4 2022 and the proforma 2022 0.58%.

Silverblatt added: “The 1% tax is an additional cost, but it is still not significant enough to impact the overall buybacks at this point. In his proposed fiscal 2024 budget, President Biden quantified increasing the tax to 4%, but no changes were incorporated into the recently passed Fiscal Responsibility Act of 2023 (debt ceiling deal). Given the initial 1% buyback tax had bipartisan support, there is an expectation that some increase and/or potentially a change to the type of buybacks that are taxed to be discussed later this year for fiscal 2024. An increase to the 2.5% area could start to impact buybacks and the EPS impact of share-count-reduction due to some of the expenditures shifting from buybacks to dividends. Any shift however would not be on a-dollar-for-dollar basis, as dividends remain a long-term pure cash-flow item which must be incorporated into corporate budgets.”

Q1 2022 GICS® Sector Analysis:

Financials, as expected, returned to the buyback market in 2023, after pulling back in Q2, Q3 and Q4 2022. For Q1 2023, Financials spent $46.9 billion on buybacks, accounting for 21.8% of all S&P 500 buybacks. This was up 108% from their Q4 2022 $22.5 billion expenditure, which represented 10.7% of buybacks, but were still down 14.3% from their Q1 2022 $54.7 billion in buybacks, which represented 19.5% of buybacks. Financials spent the most of any sector in Q1 2023, overtaking Information Technology for the first time since Q3 2017 (Information Technology had held the lead since Q4 2017). For the 12-month March 2023 period, Financials spent $113.6 billion, down from $209.9 billion for the 12-month June 2022 period. Given the recent banking events and current regulatory review, there is some discussion if the sector will again pull back on buybacks, partially to protect their dividends during stress tests.

Information Technology pulled back 20.3% on buybacks for the quarter, spending $45.9 billion in Q1 2023, representing 21.3% of all buybacks. This was down from the Q4 2022 $57.7 billion, which accounted for 27.3% of the buybacks and down from the Q1 2022 expenditure of $71.6 billion (25.5% of the buybacks). For the 12-month March period the sector spent $236.3 billion, down 14.2% from the prior period’s $275.3 billion.

Energy decreased their buybacks by 2.7% for the quarter to $19.3 billion, representing 9.0% of the buybacks compared to the prior quarter’s $19.8 billion, as the Q1 2023 quarter was an increase of 126% over Q1 2022’s $8.6 billion level. For the 12-month period ending in March 2023, Energy spent $74.5 billion on buybacks, up 259% from the prior period’s $20.8 billion.

Health Care buybacks decreased 4.9% for the quarter, spending $23.2 billion in Q1 2023, representing 10.8% of all buybacks. This was down from the Q4 2022 $24.4 billion and Q1 2022’s $41.1 billion. For the 12-month March period, the sector spent $84.8 billion, down 12.3% from prior 12-month period’s $96.9 billion.

Issues:

The five issues with the highest total buybacks for Q1 2023 are:

  • Apple (AAPL): continued to be the poster child for buybacks as it once again spent the most of any issue, with its Q1 2023 expenditure ranking as the fifteenth highest in S&P 500 history. For the quarter, the company spent $20.0 billion, down from Q4 2022’s $21.8 billion (the eleventh largest in index history). Apple holds 18 of the top 20 record quarters (Meta Platforms holds #12 and QUALCOMM holds #13). For the 12 months ending in March 2023, Apple spent $91.1 billion on buybacks, down from the prior 12-month period’s $92.4 billion. Over the five-year period, they have spent $416.9 billion, and $621.3 billion over the ten-year period.

  • Alphabet (GOOG/L): was next with $14.6 billion for Q1 2023, down from the $15.4 billion in Q4 2022; the 12-month expenditure was $60.6 billion versus the prior period’s expenditure of $52.2 billion.

  • Meta Platforms (META): $10.4 billion for Q1 2023, up from $7.5 billion in Q4 2022; the 12-month expenditure was $31.5 billion versus the prior period’s $55.5 billion.

  • Microsoft (MSFT): $5.51 billion for Q1 2023, up from $5.46 billion in Q4 2022; the 12-month expenditure was $25.3 billion versus the prior period’s $31.12 billion.

  • T-Mobile (TMUS): $4.8 billion in Q1 2023, up from $2.5 billion in Q4 2022; the 12-month expenditure was $7.9 billion versus the prior periods $0.3 billion.

  • Of note, ExxonMobil (XOM) spent $4.3 billion in Q1 2023, down from $4.7 billion in Q4 2022, as its 12-month March 2023 expenditure was $17.4 billion versus the prior 12 month’s $2.2 billion.

For more information about S&P Dow Jones Indices, please visit www.spdji.com.

S&P Dow Jones Indices

S&P 500 proforma net buyback tax impact

TAX

TAX % OF

TAX % OF

$ BILLIONS

OPERATING

AS REPORTED

Q1 2023

$1.98

0.45 %

0.49 %

2022 proforma

$8.47

0.51 %

0.58 %

2021 proforma

$7.93

0.45 %

0.47 %

S&P Dow Jones Indices

S&P 500, $ U.S. BILLIONS

(preliminary in bold)

PERIOD

MARKET

OPERATING

AS REPORTED

DIVIDEND &

VALUE

EARNINGS

EARNINGS

DIVIDENDS

BUYBACKS

DIVIDEND 

BUYBACK 

BUYBACK 

$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

$ BILLIONS

YIELD

YIELD

YIELD

12 Mo Mar,’23 Prelim.

$34,342

$1,678.51

$1,469.32

$573.73

$857.20

1.67 %

2.50 %

4.17 %

12 Mo Mar,’22

$38,288

$1,778.72

$1,675.06

$524.92

$984.60

1.37 %

2.57 %

3.94 %

2022

$32,133

$1,656.66

$1,453.43

$564.57

$922.68

1.76 %

2.87 %

4.63 %

2021

$40,356

$1,762.75

$1,675.22

$511.23

$881.72

1.27 %

2.18 %

3.45 %

2020

$31,659

$1,019.04

$784.21

$483.18

$519.76

1.53 %

1.64 %

3.17 %

2019

$26,760

$1,304.76

$1,158.22

$485.48

$728.74

1.81 %

2.72 %

4.54 %

7/10/1905

$21,027

$1,281.66

$1,119.43

$456.31

$806.41

2.17 %

3.84 %

6.01 %

3/31/2023 Prelim.

$34,342

$439.00

$404.57

$146.76

$215.53

1.67 %

2.50 %

4.17 %

12/31/2022

$32,133

$421.55

$331.50

$146.07

$211.19

1.76 %

2.87 %

4.63 %

9/30/2022

$30,119

$422.94

$373.04

$140.34

$210.84

1.83 %

3.26 %

5.09 %

6/30/2022

$31,903

$395.02

$360.21

$140.56

$219.64

1.70 %

3.15 %

4.85 %

3/31/2022

$38,288

$417.16

$388.68

$137.60

$281.01

1.37 %

2.57 %

3.94 %

12/31/2021

$40,356

$480.35

$456.72

$133.90

$270.10

1.27 %

2.18 %

3.45 %

9/30/2021

$36,538

$441.26

$420.64

$130.04

$234.64

1.37 %

2.03 %

3.40 %

6/30/2021

$36,325

$439.95

$409.02

$123.38

$198.84

1.33 %

1.68 %

3.01 %

3/31/2021

$33,619

$401.19

$388.84

$123.91

$178.13

1.43 %

1.48 %

2.91 %

12/31/2020

$31,659

$321.81

$265.00

$121.62

$130.59

1.53 %

1.64 %

3.17 %

9/30/2020

$27,868

$314.06

$273.29

$115.54

$101.79

1.75 %

2.05 %

3.80 %

6/30/2020

$25,637

$221.53

$147.44

$119.04

$88.66

1.93 %

2.52 %

4.45 %

3/31/2020

$21,424

$161.64

$98.48

$126.98

$198.72

2.31 %

3.37 %

5.68 %

12/31/2019

$26,760

$324.52

$294.29

$126.35

$181.58

1.81 %

2.72 %

4.54 %

9/30/2019

$24,707

$330.42

$282.12

$123.12

$175.89

1.94 %

3.12 %

5.06 %

6/28/2019

$24,423

$333.26

$290.00

$118.68

$165.46

1.93 %

3.27 %

5.20 %

3/29/2019

$23,619

$316.56

$291.82

$117.33

$205.81

1.97 %

3.49 %

5.45 %

S&P Dow Jones Indices

S&P 500 SECTOR BUYBACKS

SECTOR $ MILLIONS

Q1,’23

Q4,’22

Q1,’22

12MoMar,’23

12MoMar,’22

5-YEARS

10-YEARS

Consumer Discretionary

$18,301

$18,819

$28,238

$84,301

$98,873

$365,078

$785,540

Consumer Staples

$6,284

$7,033

$8,419

$35,294

$38,485

$163,182

$384,386

Energy

$19,304

$19,833

$8,552

$74,534

$20,755

$139,160

$256,567

Financials

$46,891

$22,497

$54,690

$113,632

$209,908

$734,551

$1,212,659

Healthcare

$23,194

$24,394

$41,134

$84,941

$96,898

$413,238

$777,021

Industrials

$14,239

$22,403

$24,745

$71,589

$73,474

$314,241

$652,181

Information Technology

$45,923

$57,654

$71,580

$236,303

$275,264

$1,209,727

$1,920,351

Materials

$3,773

$6,548

$7,434

$24,725

$26,555

$91,274

$158,896

Real Estate

$526

$728

$1,131

$3,174

$2,089

$13,468

$18,954

Communication Services

$35,797

$31,155

$34,069

$126,691

$139,872

$428,049

$446,104

Utilities

$1,299

$126

$1,017

$2,018

$2,423

$13,820

$19,014

TOTAL

$215,532

$211,189

$281,011

$857,202

$984,596

$3,885,787

$6,631,672

SECTOR BUYBACK MAKEUP %

Q1,’23

Q4,’22

Q1,’22

12MoMar,’23

12MoMar,’22

5-YEARS

10-YEARS

Consumer Discretionary

8.49 %

8.91 %

10.05 %

9.83 %

10.04 %

9.40 %

11.85 %

Consumer Staples

2.92 %

3.33 %

3.00 %

4.12 %

3.91 %

4.20 %

5.80 %

Energy

8.96 %

9.39 %

3.04 %

8.70 %

2.11 %

3.58 %

3.87 %

Financials

21.76 %

10.65 %

19.46 %

13.26 %

21.32 %

18.90 %

18.29 %

Healthcare

10.76 %

11.55 %

14.64 %

9.91 %

9.84 %

10.63 %

11.72 %

Industrials

6.61 %

10.61 %

8.81 %

8.35 %

7.46 %

8.09 %

9.83 %

Information Technology

21.31 %

27.30 %

25.47 %

27.57 %

27.96 %

31.13 %

28.96 %

Materials

1.75 %

3.10 %

2.65 %

2.88 %

2.70 %

2.35 %

2.40 %

Real Estate

0.24 %

0.34 %

0.40 %

0.37 %

0.21 %

0.35 %

0.29 %

Communication Services

16.61 %

14.75 %

12.12 %

14.78 %

14.21 %

11.02 %

6.73 %

Utilities

0.60 %

0.06 %

0.36 %

0.24 %

0.25 %

0.36 %

0.29 %

TOTAL

100.00 %

100.00 %

100.00 %

100.00 %

100.00 %

100.00 %

100.00 %

S&P Dow Jones Indices

S&P 500 20 LARGEST Q1 2023 BUYBACKS, $ MILLIONS 

Company  

Ticker

Sector

Q1 2023

Q4 2022

Q1 2022

12-Months

12-Months

5-Year

10-Year

Indicated

Buybacks

Buybacks

Buybacks

Mar,’23

Mar,’22

Buybacks

Buybacks

Dividend

$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

$ Million

Apple 

AAPL

Information Technology

$20,012

$21,791

$22,961

$91,101

$92,371

$416,885

$621,306

$14,278

Alphabet

GOOGL

Communication Services

$14,557

$15,407

$13,300

$60,553

$52,179

$180,574

$193,066

$0

Meta Platforms

META

Communication Services

$10,374

$7,520

$10,431

$31,494

$55,467

$121,833

$130,224

$0

Microsoft

MSFT

Information Technology

$5,509

$5,459

$8,822

$25,298

$31,116

$121,495

$180,412

$20,247

T-Mobile US

TMUS

Communication Services

$4,806

$2,461

$172

$7,877

$270

$28,973

$30,656

$0

Berkshire Hathaway

BRK.b

Financials

$4,450

$2,608

$3,180

$9,124

$23,661

$70,267

$70,267

$0

Exxon Mobil 

XOM

Energy

$4,340

$4,675

$2,067

$17,428

$2,221

$20,848

$50,599

$14,990

Wells Fargo

WFC

Financials

$4,016

$6

$6,018

$4,031

$19,886

$71,227

$116,558

$4,573

Goldman Sachs Group

GS

Financials

$3,825

$1,504

$2,031

$6,889

$4,578

$26,515

$58,810

$3,386

Chevron 

CVX

Energy

$3,607

$3,417

$0

$12,410

$618

$19,148

$27,027

$10,745

Johnson & Johnson

JNJ

Health Care

$3,548

$1,320

$1,577

$8,006

$3,595

$27,430

$60,241

$12,445

Broadcom

AVGO

Information Technology

$3,420

$1,521

$3,290

$7,007

$7,002

$28,832

$29,264

$7,689

Marathon Petroleum 

MPC

Energy

$3,180

$0

$2,846

$7,088

$7,500

$17,498

$26,852

$1,362

Thermo Fisher Scientific

TMO

Health Care

$3,000

$1,057

$2,000

$4,057

$2,101

$11,665

$14,168

$549

Mastercard

MA

Financials

$2,954

$2,418

$2,540

$9,308

$7,100

$32,750

$50,131

$1,924

Home Depot

HD

Consumer Discretionary

$2,887

$1,560

$2,308

$7,275

$13,329

$40,990

$77,341

$8,520

Charles Schwab 

SCHW

Financials

$2,842

$1,940

$0

$6,237

$0

$9,457

$9,457

$1,525

JPMorgan Chase 

JPM

Financials

$2,690

$0

$2,455

$3,397

$16,057

$70,090

$111,840

$11,733

Verisk Analytics

VRSK

Industrials

$2,512

$467

$583

$3,613

$886

$5,671

$7,375

$213

Bank of America

BAC

Financials

$2,215

$998

$2,650

$4,638

$24,306

$82,819

$112,872

$6,142

Top 20   

$104,744

$76,129

$89,231

$326,831

$364,243

$1,404,967

$1,978,466

$120,320

S&P 500

$215,532

$211,189

$281,011

$857,202

$984,596

$3,885,787

$6,631,672

$576,004

Top 20 % of S&P 500

48.60 %

36.05 %

31.75 %

38.13 %

36.99 %

36.16 %

29.83 %

20.89 %

   Gross values are not adjusted for float

S&P Dow Jones Indices

S&P 500 Q1 2023 Buyback Report

SECTOR

DIVIDEND

BUYBACK 

COMBINED

YIELD

YIELD

YIELD

Consumer Discretionary

0.88 %

2.10 %

2.98 %

Consumer Staples

2.66 %

1.57 %

4.22 %

Energy

3.75 %

4.61 %

8.36 %

Financials

1.93 %

3.03 %

4.97 %

HealthCare

1.76 %

1.74 %

3.50 %

Industrials

1.73 %

2.38 %

4.12 %

Information Technology

0.87 %

2.14 %

3.01 %

Materials

2.10 %

2.87 %

4.96 %

Real Estate

3.73 %

0.36 %

4.09 %

Communications Services

1.04 %

5.18 %

6.22 %

Utilities

3.32 %

0.21 %

3.53 %

S&P 500

1.64 %

2.42 %

4.05 %

   Uses full values (unadjusted for float)

   Dividends based on indicated; buybacks based on the last 12-months ending Q1,’23

Share Count Changes

(Y/Y diluted shares used for EPS)

>=4%

<=-4%

Q1 2023

4.02 %

18.47 %

Q4 2022

5.01 %

19.44 %

Q3 2022

7.21 %

21.24 %

Q2 2022

8.42 %

19.84 %

Q1 2022

7.62 %

17.64 %

Q4 2021

10.06 %

14.89 %

Q3 2021

10.22 %

7.41 %

Q2 2021

11.02 %

5.41 %

Q1 2021

10.40 %

5.80 %

Q4 2020

9.02 %

6.01 %

Q3 2020

8.62 %

9.62 %

Q2 2020

8.60 %

17.80 %

Q1 2020

8.00 %

19.60 %

S&amp;P 500 Q1 2023 Buybacks Again Tick up, As Sector Expenditures Shift; Buyback Tax Reduced Operating Earnings by 0.45%S&amp;P 500 Q1 2023 Buybacks Again Tick up, As Sector Expenditures Shift; Buyback Tax Reduced Operating Earnings by 0.45%

S&P 500 Q1 2023 Buybacks Again Tick up, As Sector Expenditures Shift; Buyback Tax Reduced Operating Earnings by 0.45%

S&amp;P 500 Q1 2023 Buybacks Again Tick up, As Sector Expenditures Shift; Buyback Tax Reduced Operating Earnings by 0.45%S&amp;P 500 Q1 2023 Buybacks Again Tick up, As Sector Expenditures Shift; Buyback Tax Reduced Operating Earnings by 0.45%

S&P 500 Q1 2023 Buybacks Again Tick up, As Sector Expenditures Shift; Buyback Tax Reduced Operating Earnings by 0.45%

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