Buyback Scorecard Stock Buybacks Prepare for the Bear Market |
The table below ranks the 284 companies in the S&P 500 that bought back at least 4 percent of their shares from June 30, 2013, through June 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 |
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Best |
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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 |
8,941 |
503 |
5.6 |
18.1 |
37.8 |
62.7 |
|
2 |
Humana |
Healthcare Equipment and Services |
28,650 |
1,559 |
5.4 |
55.0 |
4.9 |
62.6 |
|
3 |
AmerisourceBergen Corp. |
Healthcare Equipment and Services |
23,361 |
1,637 |
7.0 |
46.0 |
9.1 |
59.4 |
|
4 |
Southwest Airlines Co. |
Transportation |
22,114 |
1,824 |
8.2 |
70.8 |
-8.1 |
57.0 |
|
5 |
The Kroger Co. |
Food and Staples Retailing |
35,219 |
2,284 |
6.5 |
48.2 |
5.4 |
56.2 |
|
6 |
Anthem |
Healthcare Equipment and Services |
43,421 |
4,964 |
11.4 |
48.6 |
4.6 |
55.5 |
|
7 |
Edwards Lifesciences Corp. |
Healthcare Equipment and Services |
15,319 |
731 |
4.8 |
38.1 |
12.3 |
55.1 |
|
8 |
Tesoro Corp. |
Energy |
10,621 |
468 |
4.4 |
26.8 |
20.2 |
52.4 |
|
9 |
Cigna Corp. |
Healthcare Equipment and Services |
41,693 |
2,874 |
6.9 |
43.2 |
5.0 |
50.3 |
|
10 |
Red Hat |
Software and Services |
13,931 |
595 |
4.3 |
25.6 |
19.0 |
49.5 |
|
Worst |
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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 |
8,372 |
849 |
10.1 |
-1.9 |
-42.9 |
-44.0 |
|
2 |
National Oilwell Varco |
Energy |
18,726 |
2,556 |
13.6 |
-6.7 |
-26.4 |
-31.3 |
|
3 |
Fossil Group |
Consumer Durables and Apparel |
3,385 |
1,007 |
29.7 |
-12.3 |
-16.9 |
-27.2 |
|
4 |
Apache Corp. |
Energy |
21,732 |
2,612 |
12.0 |
-9.9 |
-18.1 |
-26.2 |
|
5 |
Mattel |
Consumer Durables and Apparel |
8,692 |
519 |
6.0 |
-20.0 |
-4.2 |
-23.3 |
|
6 |
FMC Technologies |
Energy |
9,581 |
407 |
4.2 |
-13.1 |
-11.6 |
-23.2 |
|
7 |
Joy Global |
Capital Goods |
3,528 |
533 |
15.1 |
-13.3 |
-6.7 |
-19.1 |
|
8 |
Murphy Oil Corp. |
Energy |
7,398 |
875 |
11.8 |
-6.1 |
-13.6 |
-18.9 |
|
9 |
Fluor Corp. |
Capital Goods |
7,815 |
1,189 |
15.2 |
-1.4 |
-15.8 |
-17.0 |
|
10 |
Coach |
Consumer Durables and Apparel |
9,562 |
525 |
5.5 |
-15.0 |
-2.1 |
-16.8 |
|
Source: Fortuna Advisors Analysis using data from the Capital IQ database. Financial Data from June 2013 to June 2015. Includes the 488 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 06/30/2015. Companies included here if $ Total Buyback / Market Capitalization is greater than 4% or if $ Total Buyback is greater than $1 billion. |
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