| Buyback Scorecard The Risk in No-Risk Stock BuybacksThe 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 ($ Millions) | $ Total Buyback as % Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | |
| 1 | Tesoro Corp. | Energy | 12,686 | 594 | 4.7 | 46.7 | 7.1 | 57.1 |
| 2 | NVIDIA Corp. | Semiconductors and Semiconductor Equipment | 17,732 | 1,266 | 7.1 | 42.0 | 4.0 | 47.7 |
| 3 | O’Reilly Automotive | Retailing | 24,997 | 2,003 | 8.0 | 43.4 | 2.1 | 46.4 |
| 4 | NIKE | Consumer Durables and Apparel | 106,524 | 5,474 | 5.1 | 31.3 | 10.3 | 44.8 |
| 5 | Starbucks Corp. | Consumer Services | 89,133 | 2,402 | 2.7 | 25.8 | 13.9 | 43.3 |
| 6 | The Kroger Co. | Food and Staples Retailing | 40,773 | 1,986 | 4.9 | 38.7 | 3.2 | 43.1 |
| 7 | VeriSign | Software and Services | 9,741 | 1,527 | 15.7 | 23.1 | 15.0 | 41.5 |
| 8 | Southwest Airlines Co. | Transportation | 28,004 | 2,135 | 7.6 | 60.5 | (12.4) | 40.6 |
| 9 | Dr Pepper Snapple Group | Food, Beverage and Tobacco | 17,605 | 921 | 5.2 | 41.0 | (2.0) | 38.1 |
| 10 | The Home Depot | Retailing | 167,677 | 14,000 | 8.3 | 30.5 | 4.8 | 36.8 |
| Worst | ||||||||
| Company | Industry | Market Cap ($ Millions) | Total Buyback ($ Millions) | $ Total Buyback as % Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | |
| 1 | NRG Energy | Utilities | 3,698 | 476 | 12.9 | (31.2) | (59.1) | (71.9) |
| 2 | Mallinckrodt | Pharmaceuticals, Biotechnology and Life Sciences | 8,653 | 384 | 4.4 | 18.9 | (61.6) | (54.3) |
| 3 | Murphy Oil Corp. | Energy | 3,862 | 625 | 16.2 | (32.5) | (18.1) | (44.8) |
| 4 | Quanta Services | Capital Goods | 3,235 | 1,700 | 52.5 | (14.4) | (32.9) | (42.6) |
| 5 | Seagate Technology | Technology Hardware and Equipment | 10,963 | 2,358 | 21.5 | (8.9) | (34.8) | (40.6) |
| 6 | Michael Kors Holdings | Consumer Durables and Apparel | 7,373 | 1,448 | 19.6 | (27.7) | (17.7) | (40.5) |
| 7 | National Oilwell Varco | Energy | 12,584 | 3,000 | 23.8 | (26.4) | (18.4) | (40.0) |
| 8 | Micron Technology | Semiconductors and Semiconductor Equipment | 14,659 | 1,053 | 7.2 | (9.3) | (32.8) | (39.0) |
| 9 | Keurig Green Mountain | Food, Beverage and Tobacco | 13,423 | 2,198 | 16.4 | (3.3) | (35.8) | (38.0) |
| 10 | Apache Corp. | Energy | 16,810 | 1,864 | 11.1 | (26.6) | (11.5) | (35.1) |
| Top Manufacturers of EPS (*) | ||||||||
| Company | Industry | Market Cap ($ Millions) | Total Buyback ($ Millions) | $ Total Buyback as % Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | |
| 1 | Motorola Solutions | Technology Hardware and Equipment | 11,914 | 5,723 | 48.0 | 6.8 | 8.0 | 15.3 |
| 2 | Northrop Grumman Corp. | Capital Goods | 34,436 | 5,850 | 17.0 | 33.5 | (0.0) | 33.5 |
| 3 | The Travelers Cos. | Insurance | 34,334 | 6,556 | 19.1 | 15.4 | 1.5 | 17.1 |
| 4 | Citrix Systems | Software and Services | 11,637 | 2,397 | 20.6 | 13.5 | 4.2 | 18.4 |
| 5 | Xerox Corp. | Software and Services | 10,762 | 2,373 | 22.1 | (1.3) | (13.2) | (14.3) |
| 6 | Whole Foods Market | Food and Staples Retailing | 11,432 | 1,663 | 14.5 | (25.9) | 3.4 | (23.3) |
| 7 | W.W. Grainger | Capital Goods | 12,720 | 1,925 | 15.1 | (9.5) | (8.9) | (17.5) |
| 8 | TE Connectivity | Technology Hardware and Equipment | 24,959 | 2,640 | 10.6 | 12.9 | (5.3) | 6.8 |
| 9 | Torchmark Corp. | Insurance | 7,050 | 672 | 9.5 | 9.4 | (1.1) | 8.2 |
| 10 | 3M Co. | Capital Goods | 92,751 | 10,890 | 11.7 | 12.6 | (4.9) | 7.0 |
* 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 December 2013 to December 2015. Includes the 485 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 12/31/2015. Companies Included here if $ Total Buyback / Market Capitalization is greater than 4% | ||||||||
