S&P Global's Stock Buyback Report Portrays Healthy Returns

S&P Global Inc. (NYSE:SPGI) division — S&P Dow Jones Indices — announced preliminary results indicating that S&P 500 share repurchases totaled $137 billion for the fourth quarter of 2017. This represents 6% increase from $129.2 billion in the previous quarter and 1.2% improvement from $135.3 billion in fourth-quarter 2016.

For 2017, S&P 500 secondary offering spent $519.4 billion on buybacks, down 3.2% from $536.4 billion in 2016 and 10% from $572.2 billion in 2015, with all-time high of $589.4 billion in 2007.

The results include the following findings.

The number of S&P 500 issues substantially reduced their year-over-year share count, which increased earnings per share (EPS) to 15.1% compared with 20% plus rate posted for 2015 and 2016.

Total shareholder return increased to $246.4 billion, up 5% from $234.6 billion in third-quarter 2017. S&P 500 dividends were up to a record-high $109.5 billion compared with $105.4 billion in the previous quarter.

For 2017, total shareholder return was $939.2 billion, up 0.6% from $933.6 billion in 2016 but down 1.6% from $954.5 billion in 2015. In the fourth quarter, 294 S&P 500 issues reduced their share count compared with 274 in the third quarter of 2017 and 281 in the fourth quarter of 2016.

All these measures point out that most S&P 500 companies have been passing the benefit of reduced corporate taxes to shareholders to reward them with healthy risk-adjusted returns. With bullish economic sentiments and favorable GDP outlook, the equity markets seem to broadly benefit from Trump’s policies.

On its part, S&P Global has been consistently making strategic investments in businesses to facilitate long-term profitability. It keeps track of different valuation and index benchmarks for investment advisors, wealth managers and institutional investors. We believe that the company’s strategic portfolio restructuring and focus on core business should continue to drive growth, going forward. This apart, opportune acquisitions and positive industry trends like surge of new high-yield bonds and leveraged loans, fueled by tight interest-rate spreads, augur well for long-term growth.

S&P Global has outperformed the industry in the last three months, with an average return of 15.5% compared with gain of 7.8% for the latter.

S&P Global has a Zacks Rank #2 (Buy). Some other top-ranked stocks in the industry include The Dun & Bradstreet Corporation (NYSE:DNB) , Intertek Group (LON:ITRK) plc (OTC:IKTSY) and TransUnion (NYSE:TRU) , each carrying the same bullish rank as S&P Global. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dun & Bradstreet has an expected long-term earnings growth rate of 4.5%. It exceeded earnings estimates in each of the trailing four quarters, with an average of 11.8%.

Intertek has an expected long-term earnings growth rate of 11%.

TransUnion has an expected long-term earnings growth rate of 10%. It exceeded earnings estimates in each of the trailing four quarters, with an average of 5.2%.

Can Hackers Put Money INTO Your Portfolio?

Earlier this month, credit bureau Equifax (NYSE:EFX) announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.

Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.

Download the new report now>>