Standard & Poor's fourth quarter 2011 preliminary buyback report for the S&P 500 Index shows buybacks declined in Q4 along with reported earnings. Preliminary earnings were reported at $186.76 in Q4 2011 versus $206.08 in Q3 2011 and $187.67 billion in Q4 2010, while buybacks declined to $91.46 billion versus $118.41 billion in the prior quarter...
In a recent research report by Thomson Reuters they note that a company's stock buyback activity generally does not add value subsequent to the buyback. A reason cited is the fact companies generally have more cash on hand in good economic environments and this tends to be after the stock price has already reflected a more positive operating environment. The report concluded:...
Stock buybacks in 2010 came roaring back, increasing 117% over 2009 buybacks. According to Standard & Poor's Howard Silverblatt, approximately $299 billion was spent by S&P 500 companies on share repurchases last year which represents a whopping 117% increase over the $138 billion spent in 2009. At this point the practice is not as deep as it was in the heydays of 2006-2007, but...
Companies have several means through which they share their prosperity with shareholders. Dividends are the portion of corporate profits paid out to stockholders in the form of cash. Share buybacks on the other hand distributes cash to existing shareholders in exchange for a fraction of the company’s outstanding equity.
Standard & Poor's reported that share buybacks in the 4th quarter of 2008 feel 66% compared to the 4th quarter of 2007. Conversely, on a sequential basis, dividends actually trended higher to $62.19 billion versus $61.44 billion in the 3rd quarter of 2008. The fact aggregate dividends did trend higher in the 4th quarter is proof there are companies that continue to increase their dividend.
Thank God Safeway has already spent billions to renovate stores...now they can cut back on capex, potentially double FCF in 2009, and set itself up for massive stock repurchases and dividend increases. This attractive stock is trading for less than 9x forward FCF.
