According to GS:
“We estimate S&P 500 dividends will decline by 25% in 2020. Dividends actually rose by 9% during 1Q. However, dividend suspensions, cuts, and eliminations will result in DPS falling by 38% during the next nine months so on a full-year basis dividends will be 25% below the level of last year.”
And:
“In total, we expect S&P 500 share repurchases will decline by 50% to $371 billion during 2020. Despite elevated market volatility, a review of sell-side analyst estimates published since the market’s peak suggests buybacks likely fell by 21% during the first quarter. However, Goldman Sachs buyback desk executions actually rose by 25% year/year. Averaging these two approaches, we assume buybacks were flat year/year during 1Q. We forecast buybacks will fall by 75% year/year in 2Q, by 70% in 3Q, and by 65% in 4Q. An additional 40% year/year slide during 1Q 2021 will result in 12-month repurchase volume that is 65% below the 2018 peak.”
Because of this:
[i]"The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act prohibits buybacks and dividends among companies that accept assistance from the Treasury. The bill stipulates that any company that borrows money from the Treasury may not repurchase stock or pay a dividend until 12 months after the loan is repaid. The bill explicitly provisions assistance for airlines, air cargo, and aerospace companies, but our economists believe any company receiving assistance under the Treasury’s $454 billion credit facility could also be subject to these restrictions. More guidance from the Treasury is expected soon.
Since the start of March, 51 S&P 500 companies accounting for 27% of 2019 aggregate buybacks have suspended their repurchase programs. While United Airlines, Delta Airlines, Southwest Airlines, and Alaska Air have suspended buybacks, not all repurchase suspensions have come from companies expected to receive government assistance. Eight of the largest US banks recently announced that they would suspend buybacks through at least the second quarter and allocate that capital toward supporting the global economy. Prominent retailers, hoteliers, and cruise operators have also suspended their buyback programs."[/i]
Estimates based on the historical relationship of EPS and buybacks:
“The historical relationship between EPS growth and buyback growth would suggest a roughly 30% decline in buybacks during 2020.”
But probably worse than that:
“However, we believe the decline in share repurchases will be worse than this relationship implies. Our quarterly review of S&P 500 earnings transcripts consistently reveals that management teams view buybacks as the lowest priority use of cash. A spate of recent suspensions, escalating employee layoffs, and increasing political and social pressure will curtail buyback spending, which remains historically elevated following the passage of corporate tax reform.”