| Buyback Scorecard Soaring Buybacks, Sagging ReturnsThe S&P 500 as Stock Repurchasers Industry Comparisons |
The table below ranks the 299 companies in the S&P 500 that bought back at least 4 percent of their shares from September 30, 2013, through September 30, 2015. The companies are ranked according to their return on investment from these repurchases. As calculated by Fortuna Advisors, a New York City-based consultancy that compiled the data for Institutional Investor, buyback ROI measures the overall rate of return of buybacks, based on the internal rate of return of the cash flows associated with them. Buyback strategy tracks the performance of the underlying stock in terms of annualized total shareholder return. Once Fortuna determines buyback ROI and buyback strategy, buyback effectiveness can then be calculated as simply the difference between the two, determined as compounded return.
| The Best and Worst Corporate Stock Buyback Programs | |||||||||
| Best | |||||||||
| Company | Industry | Market Cap ($ Millions) | Total Buyback (S Millions) | $ Total Buyback as % Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | ||
| 1 | Darden Restaurants | Consumer Services | 8,751 | 502 | 5.7 | 25.9 | 23.7 | 55.8 | |
| 2 | Tesoro Corp. | Energy | 11,970 | 693 | 5.8 | 42.3 | 8.1 | 53.8 | |
| 3 | Cigna Corp. | Healthcare Equipment and Services | 34,767 | 1,962 | 7.9 | 40.5 | 6.1 | 49.2 | |
| 4 | O’Reilly Automotive | Retailing | 24,851 | 1,962 | 7.9 | 40.5 | 6.1 | 49.2 | |
| 5 | The Kroger Co. | Food and Staples Retailing | 35,112 | 2,167 | 6.2 | 40.8 | 4.4 | 47.0 | |
| 6 | HCA Holdings | Healthcare Equipment and Services | 32,119 | 3,636 | 11.3 | 50.5 | -3.3 | 45.6 | |
| 7 | Expedia | Retailing | 16,703 | 754 | 4.5 | 48.1 | -2.4 | 44.6 | |
| 8 | Sealed Air Corp. | Materials | 9,650 | 881 | 9.1 | 36.9 | 5.5 | 44.4 | |
| 9 | Humana | Healthcare Equipment and Services | $6,530 | 1,475 | 5.6 | 43.2 | 0.9 | 44.4 | |
| 10 | Starbucks Corp. | Consumer Services | 84,362 | 2,195 | 2.6 | 26.6 | 12.8 | 42.8 | |
| Worst | |||||||||
| Company | Industry | Market Cap ($ Millions) | Total Buyback (S Millions) | $ Total Buyback as % Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | ||
| 1 | Michael Kors Holdings Ltd. | Consumer Durables and Apparel | 8,170 | 1,249 | 15.3 | -22.1 | -46.6 | -58.4 | |
| 2 | Applied Materials | Semiconductors and Semiconductor Equipment | 17,637 | 1,325 | 7.5 | 4.4 | -57.0 | -55.1 | |
| 3 | Micron Technology | Semiconductors and Semiconductor Equipment | 16,125 | 960 | 6.0 | 8.9 | -52.0 | -47.8 | |
| 4 | National Oilwell Varco | Energy | 14,450 | 3,000 | 20.8 | -19.9 | -32.6 | -46.0 | |
| 5 | NRG Energy | Utilities | 4,910 | 392 | 8.0 | -12.6 | -37.6 | -45.4 | |
| 6 | Keurig Green Mountain | Food, Beverage and Tobacco | 8,033 | 2,086 | 26.0 | -10.9 | -36.8 | -43.7 | |
| 7 | SanDisk Corp. | Technology Hardware and Equipment | 11,107 | 2,703 | 24.3 | -1.6 | -39.9 | -40.9 | |
| 8 | Fossil Group | Consumer Durables and Apparel | 2,690 | 791 | 29.4 | -25.5 | -18.4 | -39.2 | |
| 9 | Murphy Oil Corp. | Energy | 4,181 | 875 | 20.9 | -24.5 | -19.0 | -38.8 | |
| 10 | Apache Corp. | Energy | 14,802 | 2,612 | 17.6 | -25.1 | -17.9 | -38.5 | |
| Source: Fortuna Advisors Analysis using data from the Capital IQ database. Financial Data from September 2013 to September 2015. Includes the 486 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 09/30/2015. Companies included here if $ Total Buyback / Market Capitalization is greater than 4% or if $ Total Buyback is greater than $1 billion. | |||||||||
