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Can Accenture Sustain Its Regular Share Buyback Program?

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Quarterly share repurchase trend

Accenture (ACN) has always bought back shares at regular intervals, thereby driving its shareholders’ wealth. At the end of the first six months of fiscal 2018, the company repurchased shares worth $1.4 billion, which was almost the same as in the previous year’s period.

In the graph above, we can see that over the last five quarters, Accenture has bought back shares at an average of nearly $685 million per quarter. During the period, the company has spent ~$3.4 billion. However, as we can see in the chart, the company’s share repurchases in the second half of the year have been lower than its repurchases in the first half.

As of the end of February, the company is still left with $2.1 billion worth of shares to be repurchased under its buyback program. If we look at Accenture’s last five years’ worth of share repurchases, we can see that it has bought back shares worth over $2.5 billion each year, while in the last two years, it has repurchased shares worth over $2.6 billion.

Annual share buyback trend and comparison

In the last five years, Accenture has bought back ~$12.8 billion worth of shares. Similarly, other tech giants Microsoft (MSFT), IBM (IBM), and Oracle (ORCL) have repurchased shares worth $49.3 billion, $40 billion, and $42.9 billion, respectively.

Total capital return policy

Accenture has generated a strong capital return policy for its investors through share buybacks and uninterrupted dividend payments. In the last five years, the company has returned ~$18.4 billion to its shareholders at an average of nearly $3.7 billion each year. The company has utilized almost 100% of its free cash flow each year to boost its robust capital return program.

At the end of the first six months of fiscal 2018, the company had paid back total capital of nearly $2.2 billion, which was almost on par with the previous year’s period.

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