Another good use
of the shareholder yield is that it tells you approximately what rate of return you can expect if the company doesn't grow at all and if the stock valuation remains static.
The Index is comprised of the 100 companies with the best combined rank of dividend payments and net stock buybacks, which are the key components
of shareholder yield.
Studies have shown that the dividend yield is most most useful in conjunction with other measures
of shareholder yield including net buybacks and net debt reduction.
Including
all of shareholder yield's components leads to a return comparable to the return of PE, PB or PCF.
O'Shaughnessy found that the addition
of shareholder yield can improve the results of the pure play Value Factor One.
I encourage you to try backtesting other variations
of shareholder yield.
Mebane Faber explores the concept
of shareholder yield and expands upon it in his book, Shareholder Yield: A Better Approach to Dividend Investing.
A recent study by Wes Gray and Jack Vogel, Dissecting Shareholder Yield, makes the stunning claim that dividend yield doesn't predict future returns, but more complete measures
of shareholder yield might hold some promise.
Not exact matches
But if Moynihan hits his mark and returns all
of B
of A's profits to
shareholders, with earnings now in the $ 20 billion range, the
yield would rise to 8.5 %, and the total return to more like 12.5 %.
We feel this provides the best trade - off in terms
of valuations,
shareholder yield, growth expectations and the potential to buffer some
of the downside if markets sell off.
The younger O'Shaughnessy said that under his leadership, OSAM will remain focused on four investing principles: pick stocks
of companies that are profitable, cheap, have very strong price trends and offer high
yields for
shareholders.
He says that under his leadership, OSAM will remain focused on four investing principles: pick stocks
of companies that are profitable, cheap, have very strong price trends and offer high
yields for
shareholders.
If it just keeps paying out all
of its earnings,
shareholders will get a return equal to the earnings
yield (inverse
of the PE)
of 6 % plus inflation, or a decent total
of around 8 %.
Metro gets a percentage
of sales from every location, so it generates a lot
of free cash flow, which it then returns to
shareholders in the form
of 1.53 %
yield and share buybacks.
As a result, Shell has rewarded its
shareholders well, delivering a dividend
yield of nearly 6 percent, among the highest in the entire industry.
Consolidated Water Co. Ltd. (NASDAQ: CWCO) has a solid dividend
yield of 2.51 % and distributes 75.30 %
of its earnings to
shareholders as dividends.
Full - use
of the authorization would equate to 4 %
of outstanding shares and
yield of over 4 % to
shareholders.
For example, if rates are rising, you can reinvest the proceeds
of a fund that will be distributing its assets to
shareholders into a fund with a higher
yield.
Indeed, Elliott thinks Polycom could pay as much as $ 10 per share for Mitel in an all - stock transaction — which would also pay off handsomely for Elliott — and still
yield a 95 % return for Polycom
shareholders by the end
of 2018.
In some cases, a lower valuation with lower preferred share rights may
yield a higher economic outcome for common
shareholders than a higher valuation with a high level
of preferred share rights.
The SEC
yield reflects the rate at which the fund is earning income on its current portfolio
of securities while the distribution rate reflects the fund's past dividends paid to
shareholders.
While this would be bad for current
shareholders of the bank, a lower share price would translate into a higher dividend
yield, holding all else equal.
Currently, BXMT's dividend produces an approximate 8.1 % pretax
yield in the current share price and at that level, its tax deduction will provide most individual
shareholders in the top bracket in the pretax equivalent
of another 90 bps
of yield.
Combine Disney's buyback with its 1.4 % dividend
yield, and the company returns roughly 5.7 %
of its market cap to
shareholders annually.
To test these assumptions, I ran an annually rebalanced backtest
of this Meb Faber
shareholder yield metric.
I feel that the Meb Faber
shareholder yield is really a measure
of how
shareholder friendly a company is when disbursing its profits.
The lowest 20 percent
of stocks ranked by
shareholder yield are placed in the first quintile and the next 20 percent in the second quintile and so forth until we have five portfolios
of stocks.
... (NASDAQ: CWCO) CWCO has a solid dividend
yield of 2.51 % and distributes 75.30 %
of its earnings to
shareholders as dividends.
To be explicit on this: when the earnings
yield (the inverse
of a P / E ratio) is higher than the return on cash, it is beneficial to
shareholders in increasing EPS.
So far, only a portion
of this rise in company profits has been passed on to
shareholders in the form
of higher dividends; in April, the dividend
yield was 3.7 per cent compared with 3.3 per cent in January.
In other words, REITs are high -
yield pass - through stocks, designed to distribute the majority
of cash flow to
shareholders.
Well, the record shows that the declarations by our majority
shareholder and CEO are no more than hot air which have come our way before which have
yielded nothing but consolation prizes while we surrender the change
of winning big to the new breed
of bigger clubs.
Let's start with the analysis
of the Cambria Foreign
Shareholder Yield ETF (FYLD).
I consider Faber one
of the most innovative strategists in the business today, and I found his research on
shareholder yield to be compelling enough to make the Cambria Shareholder Yield ETF (SYLD) a core, long - term holding in multiple ETF portfolio
shareholder yield to be compelling enough to make the Cambria Shareholder Yield ETF (SYLD) a core, long - term holding in multiple ETF portfolios I ma
yield to be compelling enough to make the Cambria
Shareholder Yield ETF (SYLD) a core, long - term holding in multiple ETF portfolio
Shareholder Yield ETF (SYLD) a core, long - term holding in multiple ETF portfolios I ma
Yield ETF (SYLD) a core, long - term holding in multiple ETF portfolios I manage.
For example, here is a chart with accompanying statistics
of a reference ETF portfolio determined in that manner for the Cambria
Shareholder Yield ETF (SYLD):
With a buyback
yield of 7 % ttm and a dividend
yield of 1 % ttm that means Lear also provides a nice
shareholder yield of 8 %.
The second part
of this series will review the Cambria Foreign
Shareholder Yield ETF (FYLD) and the Cambria Global Value ETF (GVAL).
(For readers unfamiliar with the term, «
shareholder yield» is a holistic measure
of shareholder friendliness that includes dividends paid, shares repurchased, and debt repaid.)
In the case
of SYLD, the manager chooses what he considers to be the top 100 stocks based on
shareholder yield, as well as the portfolio weights.
The
shareholders of General Electric enjoy receiving dividend checks in the mail with a current
yield of 2.79 %.
As cash returned to
shareholders can be reinvested in the common stock
of a particular company, investors benefit from high -
yield companies as a group.
While their
yields vary dramatically, all
of them send at least some money to
shareholders.
Since the founders
of most companies want their companies to be around for a long time, that would mean that
shareholders would have no expectation
of their shares ever
yielding anything
of value within any foreseeable timeframe.
Van Vliet and de Koning suggest using a combination
of dividend
yield and buyback
yield (collectively called «
shareholder yield» in certain cases, though Van Vliet and de Koning do not use that phrase in the book) to screen for value.
Does the high
yield compensate the
shareholder for whatever risks are in the price
of the stock?
If the number
of shares owned by the investor does not change, the
yield on cost will increase if the company increases the dividend it pays to
shareholders; otherwise
yield on cost will remain constant.
QVAL appears to be just under the average
of its «active» ETF peers, in between a couple other notables: Cambria
Shareholder Yield ETF (SYLD) at 0.59 % and AdvisorShares TrimTabs Float Shrink ETF (TTFS) at 0.99 %.
Shareholder yield has been defined differently by different analysts, but Faber defines it as a combination
of (a) cash dividends, (b) net share repurchases and (c) debt repayment.
The stock performance
of Suncor has certainly rewarded Buffett and other
shareholders, as has its above average dividend
yield.
In 10 years, Coca - Cola
shareholders will have a
yield on cost
of around 7.1 % thanks to growth.