Cambria Investment Management is celebrating the 10-year anniversary of the Cambria Shareholder Yield ETF (SYLD). While there are many ways to select value stocks, shareholder yield has been one of the more successful methods, historically offering better returns than selecting stocks based on dividend yield alone. Shareholder yield is calculated as the sum of the dividend yield and the percentage of shares retired through net stock buybacks. Companies with high shareholder yields tend to generate significant free cash flow and understand the needs of shareholders. US-listed companies now return more cash to shareholders through buybacks than through dividends.
Faber notes that the stocks held in SYLD currently have one of the largest valuation discounts ever calculated relative to the US market. Shareholder yield strategies can also be implemented in non-US markets, as evidenced by the Cambria Foreign Shareholder Yield ETF (FYLD) and the Cambria Emerging Shareholder Yield ETF (EYLD).
Non-US stocks tend to have lower buyback yields and higher dividend yields, while US stocks tend to have lower dividend yields and higher buyback yields. Stocks in developed foreign and emerging markets selected through the shareholder yield strategy currently trade at a significant discount to market valuations. In addition, these funds may have a performance tailwind should the dollar weaken and value stocks strengthen.
Four books authored by Meb Faber, including one on shareholder yield, are available for free download here.
WEBCAST – 10 Years Of Shareholder Yield
Join Meb Faber, Chief Investment Officer, Cambria Investment Management as he discusses the importance of a holistic income strategy including:
- Dividend and buyback strategy considerations
- Market environment, historical performance and risk
- Differences across both US and foreign stock markets
Accepted for 1 CFP® / IWI / CFA CE Credit