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Buyback Scorecard CFOs Share Their Stock Buyback Secrets The S&P 500 as Stock Repurchasers Industry Comparisons |
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 $1 billion of their shares from March 31, 2012 through March 31, 2014, according to their return on investment. As calculated by Fortuna Advisors, a New York City-based consultancy that compiled the data for Institutional Investor, buyback ROI measures the overall rate of return of these companies’ buybacks, based on the internal rate of return of the cash flows associated with them. Buyback strategy tracks the performance of the underlying stock in terms of annualized total shareholder return. Once Fortuna determines buyback ROI and buyback strategy, buyback effectiveness can then be calculated as simply the difference between the two, determined as compounded return.
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The Best and Worst Corporate Stock Buyback Programs | |||||||||
| Best | |||||||||
| Company | Industry | Market Cap ($ Millions) | Total Buyback (S Millions) | $ Total Buyback as % Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | ||
| 1 | Keurig Green Mountain | Food, Beverage and Tobacco | 17,084 | 1,146 | 6.7 | 32.4 | 94.3 | 157.2 | |
| 2 | Gilead Sciences | Pharmaceuticals, Biotechnology and Life Sciences | 108,972 | 1,679 | 1.5 | 81.4 | 5.0 | 90.4 | |
| 3 | Southwest Airlines Co. | Transportation | 16,574 | 1,205 | 7.3 | 57.4 | 17.0 | 84.1 | |
| 4 | Yahoo! | Software and Services | 36,237 | 5,891 | 16.3 | 57.7 | 13.2 | 78.6 | |
| 5 | Boston Scientific Corp. | Healthcare Equipment and Services | 17,893 | 1,087 | 6.1 | 49.2 | 17.3 | 74.9 | |
| 6 | Western Digital Corp. | Technology Hardware and Equipment | 21,694 | 1,990 | 9.2 | 53.2 | 13.5 | 73.9 | |
| 7 | Tyson Foods | Food, Beverage and Tobacco | 14,976 | 1,025 | 6.8 | 41.5 | 22.0 | 72.6 | |
| 8 | The Dow Chemical Co. | Materials | 58,769 | 1,557 | 2.6 | 22.1 | 37.1 | 67.4 | |
| 9 | McKesson Corp. | Healthcare Equipment and Services | 40,634 | 1,344 | 3.3 | 46.9 | 13.3 | 66.4 | |
| 10 | Lincoln National Corp. | Insurance | 13,362 | 942 | 7.1 | 47.0 | 12.9 | 66.0 | |
| Worst | |||||||||
| Company | Industry | Market Cap ($ Millions) | Total Buyback (S Millions) | $ Total Buyback as % Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | ||
| 1 | Teradata Corp. | Software and Services | 7,848 | 745 | 9.5 | -13.4 | -10.8 | -22.8 | |
| 2 | CenturyLink | Telecommunication Services | 18,980 | 1,940 | 10.2 | -4.3 | -9.6 | -13.4 | |
| 3 | Edwards Lifesciences Corp. | Healthcare Equipment and Services | 7,797 | 1,050 | 13.5 | -3.1 | -10.0 | -12.8 | |
| 4 | Citrix Systems | Software and Services | 10,555 | 557 | 5.3 | -9.2 | -3.7 | -12.6 | |
| 5 | Apache Corp. | Energy | 32,742 | 1,500 | 4.6 | -9.9 | -1.9 | -11.6 | |
| 6 | Quest Diagnostics | Healthcare Equipment and Services | 8,356 | 1,219 | 14.6 | -2.5 | -9.3 | -11.6 | |
| 7 | Coach | Consumer Durables and Apparel | 13,785 | 1,094 | 7.9 | -15.1 | 4.7 | -11.1 | |
| 8 | Mattel | Consumer Durables and Apparel | 13,652 | 555 | 4.1 | 16.3 | -21.3 | -8.5 | |
| 9 | CH Robinson Worldwide | Transportation | 7,719 | 1,004 | 13.0 | -7.1 | -1.5 | -8.5 | |
| 10 | Marathon Oil Corp. | Energy | 24,573 | 1,051 | 4.3 | 3.8 | -11.6 | -8.2 | |
| Source: Fortuna Advisors Analysis using data from the Capital IQ database. Financial Data from March 2012 to March 2014. Includes the 490 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 03/31/2014. Companies Included here if $ Total Buyback / Market Capitalization is greater than 4% or if $ Total Buyback is greater than $1 Billion. | |||||||||