The Meb Faber Show - Better Investing
MEBISODE: A Better Approach to Dividend Investing
Feb 21, 2024
Explore a better approach to dividend investing with insights on shareholder yield ETF (SYLD) and the outperformance of Cambria SYLD. Learn about important factors and risks when investing in dividend funds, such as charges, expenses, and potential pitfalls like high commission costs and international investing risks.
08:02
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Quick takeaways
- Combining cash dividends and net stock buybacks in a Shareholder Yield approach outperforms broad stock market investing.
- Cambria Shareholder Yield ETF (SYLD) demonstrates superior returns by incorporating both dividends and buybacks in its strategy.
Deep dives
The Rise of Stock Buybacks
Companies have shifted from predominantly distributing cash to shareholders in the form of dividends to utilizing stock buybacks as a means of cash distribution. The Shareholder Yield book advocates for a more holistic approach, combining both cash dividends and net stock buybacks, as a superior way to invest in stocks. Historical simulations have shown that a shareholder yield approach outperformed investing in the broad stock market, as well as strategies based solely on dividend income or growth.
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