Stock Buybacks: CFOs Making the Same Mistake Again

 |  Includes: BMY, DE, GS
by: Kenneth Hackel, CFA

As if public enterprises didn’t learn their lesson the first time, we are again seeing stepped-up buyback activity. For the S&P 500, during their reporting latest quarter, the firms in aggregate bought back $80.8 billion in common and preferred stock versus $67 billion a year earlier, a greater than 20% increase. As of the latest reporting period, S&P firms in aggregate have reported the following:

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Interesting how cash dividends have deceased as a whole. Bristol-Myers (NYSE:BMY) ($65 MM), Deere (NYSE:DE) ($117 MM) and Goldman Sachs (NYSE:GS) ($182 MM) were a few paying lower dividends. The fall in long term debt issuance is a reflection of the build in cash resulting from increased free cash flow.

Disclosure: No positions