S&P Dow Jones Indices announced today the launch of the S&P 500® Buyback Index which is designed to measure the performance of the top 100 stocks with the highest buyback ratio in the S&P 500.
“Buybacks can be seen as an important indicator of corporate health,” says Vinit Srivastava, Senior Director of Strategy Indices at S&P Dow Jones Indices. “Much like dividends, corporate buybacks is another method that companies use to return value back to shareholders. In 2012, S&P 500 companies bought back $399 billion worth of stock, and continue to hold record amounts of cash.”
The S&P 500 Buyback Index measures the 100 constituent companies in the S&P 500 with the highest buyback ratio in the last 12 months. The buyback ratio is defined as the ratio of the total cash put towards buybacks in the trailing year and the market capitalization of the company as of areference date. Constituents are equally weighted and the index is rebalanced quarterly.
