Buyback Scorecard The Most and Least Effective Stock Buyback Programs |
The table below shows the 10 most and least effective stock buyback programs among the companies in the S&P 500 that bought back at least 4 percent or $1 billion of their shares from June 30, 2011 through June 30, 2013, according to their return on investment. 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 these companies’ 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 Capitalization |
$ Total Buyback |
$ Total Buyback / Market Cap |
Buyback Strategy |
Buyback Effectiveness |
Buyback ROI |
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1 |
Constellation Brands |
Food, Beverage and Tobacco |
$9,809 |
$797 |
8.1% |
52.3% |
30.9% |
99.4% |
|
2 |
Gilead Sciences |
Pharmaceuticals, Biotechnology and Life Sciences |
$78,205 |
$1,860 |
2.4% |
60.0% |
13.3% |
81.3% |
|
3 |
Tesoro Corp. |
Energy |
$7,210 |
$360 |
5.0% |
52.9% |
16.7% |
78.5% |
|
4 |
Western Digital Corp. |
Technology Hardware and Equipment |
$14,677 |
$1,446 |
9.9% |
26.5% |
37.9% |
74.5% |
|
5 |
Tenet Healthcare Corp. |
Healthcare Equipment and Services |
$4,771 |
$620 |
13.0% |
31.1% |
31.9% |
72.9% |
|
6 |
H&R Block |
Consumer Services |
$7,567 |
$525 |
6.9% |
37.2% |
24.3% |
70.5% |
|
7 |
Seagate Technology |
Technology Hardware and Equipment |
$16,074 |
$4,080 |
25.4% |
63.8% |
1.1% |
65.6% |
|
8 |
Celgene Corp. |
Pharmaceuticals, Biotechnology and Life Sciences |
$48,795 |
$5,454 |
11.2% |
43.2% |
13.7% |
62.8% |
|
9 |
GameStop Corp. |
Retailing |
$4,944 |
$523 |
10.6% |
19.5% |
36.3% |
62.8% |
|
10 |
Biogen Idec |
Pharmaceuticals, Biotechnology and Life Sciences |
$51,083 |
$1,137 |
2.2% |
51.6% |
6.0% |
60.7% |
|
Worst |
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Company |
Industry |
Market Capitalization |
$ Total Buyback |
$ Total Buyback / Market Cap |
Buyback Strategy |
Buyback Effectiveness |
Buyback ROI |
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1 |
Cliffs Natural Resources |
Materials |
$2,488 |
$290 |
11.7% |
-52.4% |
-3.9% |
-54.3% |
|
2 |
Apple |
Technology Hardware and Equipment |
$372,202 |
$17,950 |
4.8% |
14.0% |
-50.1% |
-43.1% |
|
3 |
F5 Networks |
Technology Hardware and Equipment |
$5,421 |
$485 |
8.9% |
-13.6% |
-6.6% |
-19.3% |
|
4 |
Teradata Corp. |
Software and Services |
$8,208 |
$550 |
6.7% |
-0.2% |
-19.0% |
-19.2% |
|
5 |
Edwards Lifesciences Corp. |
Healthcare Equipment and Services |
$7,591 |
$744 |
9.8% |
-9.0% |
-6.9% |
-15.2% |
|
6 |
Devon Energy Corp. |
Energy |
$21,062 |
$1,042 |
4.9% |
-17.4% |
9.4% |
-9.7% |
|
7 |
Juniper Networks |
Technology Hardware and Equipment |
$9,776 |
$1,083 |
11.1% |
-29.5% |
-28.7% |
-9.2% |
|
8 |
CH Robinson Worldwide |
Transportation |
$9,041 |
$577 |
6.4% |
-12.2% |
5.0% |
-7.8% |
|
9 |
Dell |
Technology Hardware and Equipment |
$23,400 |
$1,861 |
8.0% |
-6.1% |
-1.2% |
-7.2% |
|
10 |
Altera Corp. |
Semiconductors and Semiconductor Equipment |
$10,561 |
$543 |
5.1% |
-14.2% |
8.8% |
-6.7% |
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Source: Fortuna Advisors Analysis using data from the Capital IQ database. Financial Data from June 2011 to June 2013. Includes the 487 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 06/30/2013. 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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