Stock buybacks have been a divisive practice ever since the Securities and Exchange Commission (SEC) started allowing them in 1982. When a company implements a buyback program, it essentially repurchases shares of the company from public shareholders, thus drastically reducing the number of outstanding shares on the open market. Not only does this give the firm more control of the company, but it also manipulates the dynamics of supply and demand: a lower supply of shares means higher demand, which subsequently boosts the company’s stock price.
Investors sometimes negatively view buybacks as a form of financial engineering that benefits company executives. Since they’re typically paid in the company’s stock options, it’s easy to think those executives institute buyback programs just so they can artificially inflate the stock price and enrich their personal wealth. That angle can certainly justify the explosive popularity of buybacks, the peak of which has historically preluded economic turmoil: the number of buybacks among S&P 500 companies quadrupled from 2003 to 2007 right before the financial crisis arrived.
It’s since resurged in popularity, with different sectors embracing it more than others. The largest pharma companies, for instance, spent $300 billion on buybacks between 2008 and 2017. That’s more than the total market cap of Pfizer Inc. (PFE), the largest U.S. pharma firm.
And while the number of buybacks still hovers at insane highs, S&P 500 companies have started to slow down a bit. New data from S&P Global and Axios shows $205.8 billion worth of shares were bought by S&P firms in Q1 2019, marking a 7.7% decline from Q4 2018 and ending a four-quarter streak of consecutive record buyback activity.
Here are the 10 S&P firms with the biggest buyback totals in the first quarter…
No. 10: Eli Lilly and Co. (LLY)
Pharma companies bought back billions of dollars worth of shares from January to March, and Eli Lilly was no exception. The Indiana-based firm spent $3.5 billion on stock buybacks during the first quarter. That’s more than triple the $1.1 billion spent in the last and first quarters of 2018, which saw equal buyback spending.
No. 9: Citigroup Inc. (C)
Four of the top 10 buyback spenders last quarter were in the financial sector. As the fourth-largest U.S. bank by total fees, Citigroup ranked lowest in the group last quarter by repurchasing $4.4 billion worth of shares, marking the second straight quarterly drop. After spending hit $5.2 billion in Q3 2018, it dropped to $4.6 billion in Q4 and $4.4 billion most recently.
No. 8: Microsoft Corp. (MSFT)
As the No. 1 company on this list proves, tech is typically the dominant force in the buyback world. As of April, information tech (IT) firms in particular have already announced plans to buy back a whopping $53 billion worth of shares over various time periods. Microsoft alone repurchased $4.8 billion worth of MSFT stock in the first quarter, down more than 22% from $6.2 billion in the previous quarter.
No. 6: Wells Fargo & Co. (WFC)
Wells Fargo spent $5.1 billion on stock buybacks between January and March, a sharp 29.4% decrease from the $7.22 billion spent between October and December. It reached a record high in Q3 2018 when the firm repurchased $7.29 billion worth of shares, which was seen as a way to lift the WFC stock price following years of scandals and scrutiny.
No. 6: JPMorgan Chase & Co. (JPM)
The world’s largest investment bank actually tied with the ninth-largest by spending $5.1 billion on buybacks last quarter. That was down 14% from the decade high of $5.93 billion seen in Q4 2018.
No. 5: Cisco Systems Inc. (CSCO)
The network equipment company ranks as the third-biggest tech spender on the list. It repurchased $6.1 billion worth of shares in Q1, up an even 25% from the $4.88 billion spent in the last quarter of 2018. This makes sense when considering CSCO’s almost perfectly steady 25% rise between January and March.
No. 4: Bank of America Corp. (BAC)
Bank of America is often considered the unofficial buyback king of the financial sector, as its buyback spending has increased an insane 530% over the last three years. The company bought back $6.3 billion worth of its shares in Q1, a more than 20% increase from $5.23 billion in Q4 2018.
No. 3: Pfizer Inc. (PFE)
Unsurprisingly, the country’s biggest pharma company is also the highest-spending pharma company on share buybacks. It spent $8.9 billion repurchasing stock last quarter, up 78% from $5 billion in the prior quarter. Pfizer is on something of a buyback streak lately: it went from no buyback activity at all in Q2 2018 to the sector’s buyback king in Q1 2019.
No. 2: Oracle Corp. (ORCL)
The cloud software titan spent an even $10 billion on buybacks in its fiscal first quarter. However, it’s already started winding down buyback spending, as recent data indicates Oracle repurchased only $5.6 billion worth of shares in the March-May period.
No. 1: Apple Inc. (AAPL)
The S&P leader in buybacks last quarter was Apple, which has long been known as the market’s biggest share repurchaser. The tech giant holds eight of the 10 all-time records for quarterly buybacks and has spent more than $75 billion on its own shares over just the past year alone, bucking the trend that buyback activity among S&P companies is slowing. Apple repurchased $23.8 billion worth of shares in Q1, more than double the $8.8 billion it spent in Q4 2018.