Masters in Business
At the Money: Getting More Out of Dividends with Shareholder Yield
Oct 30, 2024
Meb Faber, Co-Founder and CIO of Cambria Investment Management, dives into the world of shareholder yield, highlighting its broader definition beyond just dividends. He explains how including share buybacks and debt paydowns can enhance returns. The discussion weaves through market analyses of large, mid, and small caps, revealing the performance differences with traditional strategies. Faber also touches on the landscape for shareholder yield ETFs and even connects personal growth through therapy, emphasizing holistic investor well-being.
11:32
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Quick takeaways
- Shareholder yield, encompassing dividends and buybacks, offers investors a more comprehensive metric for evaluating total returns.
- Companies with strong cash flow can utilize multiple strategies including dividends and buybacks to enhance shareholder value effectively.
Deep dives
Understanding Shareholder Yield
Shareholder yield refers to the total cash payout to shareholders, which includes both dividends and net stock buybacks. This metric provides a more comprehensive picture of how companies distribute cash to their investors, contrasting with traditional views that focus solely on dividends. The significance of this approach is underscored by companies like Apple, which utilize both dividends and buybacks to return value to shareholders. Recognizing shareholder yield is crucial for investors looking to maximize their returns, as those who only consider dividends may overlook significant additional value.
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