Buyback Scorecard Have Stock Buybacks Lost Their Credibility?The S&P 500 as Stock Repurchasers Industry ComparisonsThe table below ranks the 305 companies in the S&P 500 that bought back at least 4 percent or more than $1 billion of their shares from March 31, 2014 to March 31, 2016. 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 ProgramsBest
| Company | Industry | Market Capitalization | $ Total Buyback | $ Total Buyback / Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | |
| 1 | Tyson Foods | Food, Beverage and Tobacco | $26,034 | $1,341 | 5.2% | 27.2% | 35.4% | 72.2% |
| 2 | NVIDIA Corp. | Semiconductors and Semiconductor Equipment | $19,311 | $1,401 | 7.3% | 35.8% | 7.0% | 45.3% |
| 3 | Nasdaq | Diversified Financials | $10,879 | $584 | 5.4% | 28.2% | 7.1% | 37.4% |
| 4 | Darden Restaurants | Consumer Services | $8,502 | $643 | 7.6% | 23.5% | 9.7% | 35.5% |
| 5 | Global Payments | Software and Services | $8,446 | $671 | 7.9% | 31.4% | 2.3% | 34.4% |
| 6 | VeriSign | Software and Services | $9,692 | $1,553 | 16.0% | 20.2% | 10.2% | 32.4% |
| 7 | O’Reilly Automotive | Retailing | $26,553 | $2,293 | 8.6% | 33.8% | (1.1%) | 32.2% |
| 8 | Dr Pepper Snapple Group | Food, Beverage and Tobacco | $16,738 | $950 | 5.7% | 38.1% | (6.0%) | 29.8% |
| 9 | Northrop Grumman Corp. | Capital Goods | $35,809 | $5,562 | 15.5% | 28.8% | 0.5% | 29.4% |
| 10 | McDonald’s Corp. | Consumer Services | $113,314 | $13,170 | 11.6% | 15.6% | 11.3% | 28.7% |
Worst
| Company | Industry | Market Capitalization | $ Total Buyback | $ Total Buyback / Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | |
| 1 | Micron Technology | Semiconductors and Semiconductor Equipment | $10,862 | $1,034 | 9.5% | (31.4%) | (42.9%) | (60.8%) |
| 2 | Murphy Oil Corp. | Energy | $4,338 | $375 | 8.6% | (40.2%) | (30.1%) | (58.2%) |
| 3 | NRG Energy | Utilities | $4,110 | $476 | 11.6% | (35.1%) | (34.9%) | (57.8%) |
| 4 | Marathon Oil Corp. | Energy | $9,399 | $449 | 4.8% | (45.9%) | (13.3%) | (53.1%) |
| 5 | E*TRADE Financial Corp. | Diversified Financials | $6,844 | $351 | 5.1% | 5.1% | (52.1%) | (49.6%) |
| 6 | Seagate Technology | Technology Hardware and Equipment | $10,212 | $2,203 | 21.6% | (19.1%) | (32.2%) | (45.1%) |
| 7 | Navient Corp. | Diversified Financials | $4,104 | $1,480 | 36.1% | (14.9%) | (33.7%) | (43.6%) |
| 8 | FMC Technologies | Energy | $6,208 | $419 | 6.7% | (29.4%) | (20.0%) | (43.5%) |
| 9 | BorgWarner | Automobiles and Components | $8,379 | $597 | 7.1% | (23.0%) | (26.7%) | (43.5%) |
| 10 | National Oilwell Varco | Energy | $11,687 | $3,000 | 25.7% | (30.9%) | (18.2%) | (43.5%) |
Top Manufacturers of EPS (*)
| Company | Industry | Market Capitalization | $ Total Buyback | $ Total Buyback / Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | |
| 1 | Bed Bath & Beyond | Retailing | $8,120 | $3,351 | 41.3% | (16.8%) | (11.7%) | (26.6%) |
| 2 | Navient Corp. | Diversified Financials | $4,104 | $1,480 | 36.1% | (14.9%) | (33.7%) | (43.6%) |
| 3 | Juniper Networks | Technology Hardware and Equipment | $9,760 | $2,594 | 26.6% | (0.9%) | 7.3% | 6.4% |
| 4 | Harley-Davidson | Automobiles and Components | $9,416 | $2,215 | 23.5% | (17.1%) | (14.6%) | (29.1%) |
| 5 | Northrop Grumman Corp. | Capital Goods | $35,809 | $5,562 | 15.5% | 28.8% | 0.5% | 29.4% |
| 6 | Illinois Tool Works | Capital Goods | $36,966 | $3,923 | 10.6% | 9.3% | (6.4%) | 2.4% |
| 7 | Ameriprise Financial | Diversified Financials | $15,823 | $3,342 | 21.1% | (7.6%) | (19.9%) | (26.0%) |
| 8 | Whole Foods Market | Food and Staples Retailing | $10,099 | $1,708 | 16.9% | (22.4%) | 6.7% | (17.2%) |
| 9 | Discover Financial Services | Diversified Financials | $21,091 | $3,337 | 15.8% | (5.5%) | (13.1%) | (17.9%) |
| 10 | McDonald’s Corp. | Consumer Services | $113,314 | $13,170 | 11.6% | 15.6% | 11.3% | 28.7% |
* Manufacturers of EPS considers S&P threshold companies with low (negative) Earnings Growth but high reduction in share count to generate positive EPS Growth. ** EPS calculation = Quarterly Reported Net Income / Actual Quarter’s Reported Total Shares Outstanding. Source: Fortuna Advisors Analysis using data from the Capital IQ database. Financial Data from March 2014 to March 2016. Includes the 486 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 3/31/2016. Companies Included here if $ Total Buyback / Market Capitalization is greater than 4% | ||||||||
