Published Fri, 04 Oct 2019 13:32:50 -0400 on Seeking Alpha
Why Share Repurchases Are So Important In my first article on the total yield investing (shareholder yield), I explained the main reasons why investors should focus on the total cash returns and not just on dividend distributions.
Dividends are just one side of the story. The net change in outstanding shares is the other side. Currently, buybacks are more important than dividends. However, investors frequently overlook share dilutions and underappreciate stock repurchases.
At the end of the second quarter, on a trailing four-quarter basis, the S&P companies distributed $1.27 trillion via buybacks and dividends. However, at $797 billion, buybacks were significantly bigger than dividends at $469 billion.
According to the following data, the S&P 500 companies distribute approximately 70% more via buybacks than via dividends. Due to this fact, buybacks should be an integral part of a yield-focused strategy.
Source: Yardeni Research
During the second quarter of fiscal 2019, the annualized yield for the S&P 500 (SPY) companies was 1.92%, which is significantly below the historical average. However, by considering only the dividend yield, one misses more than half of the total cash flows to shareholders.
For the same period, the S&P 500's annualized share buyback yield was 3.26%. As buybacks now account for almost two-thirds of the S&P 500's shareholder yield of 5.18%, they are a crucial variable for achieving higher total... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|SPDR S&P 500 ETF||301.29||0.0||0.00||5.42||1.82|
Older articles featuring Spdr S&p 500 Etf (SPY):REITs And Utilities Dive As Yields Jump
5 Safe And Cheap Dividend Stocks To Invest (November 2019)
Quietly, Bond Yields Are Surging And TLT Is Declining
Stocks Will Lose Patience With Sharply Higher Yields If Bond Bloodbath Continues
Yield Curve Improvement Bodes Well For Economy
Dividends By The Numbers In October 2019
Weekly Review: High-Yield CEFs - The Price Of The Benchmark Left In Red Territory
There's Almost Always A Buying Opportunity After An Inverted Yield Curve
EXD: 8.9% Distribution Yield And An Undeserved Discount
High Dividend Of The Year: 15% Yield, Out Of Favor Sector, Big Returns With BDCL