Despite Market Swoon, S&P 500 Buybacks Set Another Record in Q1

© Reuters.

By Sam Boughedda

S&P Jones Indices announced preliminary stock buybacks and share repurchases data for Q1 Thursday, showing share repurchases were a record $281 billion, up 4% from Q4 2021’s record of $270.1 billion. The record buyback news comes as the S&P 500 recently entered a bear market, or down 20%.

According to the data, 374 companies reported buybacks of at least $5 million during the quarter, up from 325 in Q4 2021. In addition, 395 companies did some buybacks for the quarter, up from 383 in Q4 2021.

The buybacks were top-heavy, with the top 20 companies accounting for 42.1% of buybacks in the period. Apple (NASDAQ:), Alphabet (NASDAQ:), Meta (NASDAQ:), Microsoft (NASDAQ:) and S&P Global (NYSE:) made up the top five companies with the highest total buybacks in the first quarter.

Apple was the largest, spending $23 billion, down 1.7% from Q4’s $23.4 billion. The tech giant holds 18 of the top 20 record quarters.

“Companies continued their record-breaking buyback and dividend expenditures in Q1 2022, even as prices declined and market volatility and uncertainty increased,” said Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices. “The record expenditures led to 17.6% of the companies in the S&P 500 increasing their earnings-per-share by at least 4% thanks to their newly lowered share count, up from the 5.8% in Q1 2021.”

Looking ahead, Silverblatt sees companies maintaining buyback activities in the second quarter throughout the current downturn.

“Beyond Q2, at the minimum, companies are expected to cover exercised options, with stronger-cash-flow issues continuing to reduce shares,” added Silverblatt.