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Buyback Scorecard A Tale of Two Stock Buybacks The S&P 500 as Stock Repurchasers Best and Worst Programs |
The table below ranks industries by the weighted average buyback ROI of their S&P 500 constituents from December 31, 2011 through December 31, 2013. 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.
| How Industries Compare as Stock Repurchasers | |||||||||
| Industry | Market Capitalization | $ Total Buyback | $ Total Buyback / Market Cap | Buyback Strategy | Buyback Effectiveness | Buyback ROI | |||
| Automobiles and Components | 186,374 | 10,840 | 5.8 | 29.9 | 12.1 | 45.6 | |||
| Diversified Financials | 710,369 | 42,313 | 6.0 | 36.6 | 2.0 | 39.3 | |||
| Media | 645,743 | 54,006 | 8.4 | 40.4 | -1.0 | 38.9 | |||
| Insurance | 504,160 | 35,085 | 7.0 | 38.4 | -0.2 | 38.1 | |||
| Capital Goods | 1,402,830 | 62,160 | 4.4 | 30.0 | 3.3 | 34.2 | |||
| Pharmaceuticals, Biotechnology and Life Sciences | 1,348,265 | 80,598 | 6.0 | 30.9 | 2.1 | 33.6 | |||
| Technology Hardware and Equipment | 1,033,141 | 75,477 | 7.3 | 21.5 | 8.9 | 32.3 | |||
| Commercial and Professional Services | 116,079 | 3,769 | 3.2 | 27.5 | 1.4 | 29.3 | |||
| Retailing | 802,310 | 53,607 | 6.7 | 34.3 | -3.7 | 29.3 | |||
| Healthcare Equipment and Services | 699,007 | 50,713 | 7.3 | 24.3 | 3.3 | 28.4 | |||
| Transportation | 349,227 | 16,459 | 4.7 | 22.7 | 3.4 | 26.9 | |||
| Consumer Durables and Apparel | 243,940 | 8,595 | 3.5 | 25.7 | 0.9 | 26.8 | |||
| Banks | 1,035,213 | 29,142 | 2.8 | 35.1 | -7.3 | 25.3 | |||
| Materials | 597,203 | 15,024 | 2.5 | 30.8 | -4.2 | 25.3 | |||
| Food and Staples Retailing | 518,784 | 27,795 | 5.4 | 26.7 | -1.3 | 25.1 | |||
| Household and Personal Products | 370,150 | 19,219 | 5.2 | 18.7 | 1.3 | 20.2 | |||
| Consumer Services | 320,659 | 13,202 | 4.1 | 19.4 | 0.2 | 19.6 | |||
| Software and Services | 1,819,019 | 102,159 | 5.6 | 18.0 | 0.8 | 18.9 | |||
| Semiconductors and Semiconductor Equipment | 336,546 | 19,328 | 5.7 | 12.4 | 5.1 | 18.1 | |||
| Food, Beverage and Tobacco | 908,596 | 44,480 | 4.9 | 17.4 | -1.9 | 15.1 | |||
| Energy | 1,686,832 | 73,675 | 4.4 | 16.1 | -1.8 | 14.0 | |||
| Real Estate | 350,197 | 1,621 | 0.5 | 20.7 | -8.1 | 10.9 | |||
| Utilities | 472,716 | 1,804 | 0.4 | 11.1 | -3.0 | 7.8 | |||
| Telecommunication Services | 353,993 | 27,556 | 7.8 | 14.6 | -8.8 | 4.6 | |||
| S&P 500 | 16,811,354 | 868,630 | 5.2 | 25.9 | 0.7 | 26.7 | |||
| Source: Fortuna Advisors Analysis using data from the Capital IQ database. Financial Data from December 2011 to December 2013. Includes the 486 members of the current S&P 500 that were public for the full period. Market Capitalization as of: 12/31/2013. Companies Included here if $ Total Buyback / Market Capitalization is greater than 4% or if $ Total Buyback is greater than $1 Billion. | |||||||||