Additionally, the buyback yield for small-caps – the dollar amount of repurchased shares divided by the company’s market cap – averages 1.5% compared to 2.7% prior to the crisis, according to Barclays.
Small-cap consumer discretionary and technology firms have been buyback leaders in that cap spectrum, extending a theme that has been seen over the past several years with large-cap share repurchasers. Discretionary and technology are the two largest sector weights in the PowerShares Buyback Achievers Portfolio (NYSEArca: PKW), combining for over 52% of the largest buyback ETF’s sector weight. The SPDR S&P 500 Buyback ETF (NYSEArca: SPYB) devotes 47% of its weight to the those sectors. [Buyback Bonanza Continues]
Rising small-cap buybacks cement the utility of smaller market stocks and the ETFs that hold those equities as legitimate avenues for shareholder rewards.“From the end of 2013 there has been a 10.2% increase in the number of issues paying a dividend in the S&P SmallCap 600,” according to S&P Dow Jones Indices. More than half the members of the S&P SmallCap 600 currently pay dividends. [Small-Cap ETFs Become Dividend Players]
Tom Lydon’s clients own shares of IWM.