The Yields That Matter

September 27, 2019 | Sam Rook


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Dividends only tell a partial story

When you typically think of industries that pay you a good yield, you think of communications or utilities and the other stable and slow growing sectors. In general that is true when you look at the straight cash dividends paid to shareholders.

 

However, there is another measure that I think is far more interesting - the measure of a company’s cash dividend PLUS its share repurchases in the year. We call that the Shareholder Yield and it is a more accurate measurement of an investment's true yield, because companies that buy back their shares also are helping remaining shareholders by making each share a bit more valuable.

 

Without further comment, here is a great set of data on Shareholder Yield by industry. You will be surprised.

(Source: https://www.barrons.com/articles/dividends-vs-buybacks-how-to-read-a-stocks-yield-signals-51569495605?mod=hp_BRIEFLIST_5&mod=article_inline )

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