Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }
Coronavirus information
Coronavirus information
The Zero Canada Project provides resources to help you manage your health, your finances and your family life as Canada reopens.
Visit the hub

After a 3.2-per-cent increase in U.S. corporate share buybacks between the third and fourth quarters, investors will see first-quarter reductions and a “dismal” second quarter as companies look to conserve cash during the coronavirus crisis, according to S&P Dow Jones Indices.

Along with the direct support to share prices when buybacks are made, they also swell earnings per share in quarterly reports as they result in lower share counts at the companies. But since they are easier to suspend than dividends, buybacks tend to be the first place companies reduce capital returns to shareholders in a downturn.

Companies that have already announced a pause in buybacks include the eight big U.S. banks that are members of the Financial Services Forum. On Tuesday, announcements of buyback suspensions came from companies including Intel Corp. and Chevron Corp.

Story continues below advertisement

Howard Silverblatt, senior analyst at S&P Dow Jones Indices, says buybacks may be depressed for the full year as “companies are going to be concerned about their liquidity” for a while even when things start looking up.

“When we believe the virus has hit the bottom then you start the long way up for the economy which is going to be relatively slow to recover. It’s going to take a quarter or more for companies to put their toes back in the water,” Mr. Silverblatt said.

U.S. companies spent US$181.6-billion on buying their own shares in the fourth quarter, above the third quarter of 2019 but 18.6-per-cent lower than the record reached in the fourth quarter of 2018, due to a spending spree resulting from massive tax cuts.

Full year 2019 buybacks were US$728.7-billion, down from the US$806.4-billion record set in 2018.

Buyback spending in the fourth quarter was more concentrated however, with the top 20 companies accounting for 55 per cent of the total, for the highest level of concentration since the first quarter of 2010 when the top 20 companies represented 59.8 per cent of buybacks.

Almost 21 per cent of companies reduced their share count by at least 4 per cent in the fourth quarter.

Apple Inc led spending in the quarter with US$22.1-billion in buybacks while three of the top 5 spenders on their own shares were banks – Bank of America, Wells Fargo, JPMorgan. The other big spender in the group was Bristol-Myers Squibb.

Follow related topics

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies