Once-Mighty Buybacks Land With Thud as Profit Margins Shrink
- Repurchases less effective in masking declining earnings
- S&P 500 Buyback Index at 16-month low versus broader measure
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The share-enriching influence of buybacks, a pillar of the 6 1/2-year equity bull market, is diminishing. But that doesn’t mean companies have stopped trying.
A Standard & Poor’s index of companies repurchasing the most shares is trading at the lowest level in 16 months relative to an equal-weight gauge of S&P 500 members, Bloomberg data show. Meanwhile, U.S. companies bought back about $150 billion in the third quarter, up 14 percent from the previous three-month period, according to data compiled by S&P Dow Jones Indices.