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Shareholder Yield: A Better Approach to Dividend Investing
Shareholder Yield: A Better Approach to Dividend Investing shows step-by-step how to find returns in a low yield world. Investors have flocked to dividend stocks in search of yield; however, fewer companies are paying out less in dividends due to legal, tax, and structural changes in the US markets. Dividend payments are only one use of a company’s free cash flow; other uses of cash include: share repurchases, debt paydown, reinvestment in the business, and mergers and acquisitions.
Consequently, investors in the 21st century must look to all of the direct and indirect ways in which companies distribute their cash to shareholders, a metric commonly referred to as “Shareholder Yield”. In this book, we analyze portfolios based on the various cash flow metrics and find that portfolios of companies with high shareholder yields outperform both broad market indices and high dividend yield portfolios by a substantial margin.
With all of the uncertainty in the markets today, Shareholder Yield helps the reader answer one of the most often asked question in investing today - "Where do I find yield"?
-- Amazon.com
Consequently, investors in the 21st century must look to all of the direct and indirect ways in which companies distribute their cash to shareholders, a metric commonly referred to as “Shareholder Yield”. In this book, we analyze portfolios based on the various cash flow metrics and find that portfolios of companies with high shareholder yields outperform both broad market indices and high dividend yield portfolios by a substantial margin.
With all of the uncertainty in the markets today, Shareholder Yield helps the reader answer one of the most often asked question in investing today - "Where do I find yield"?
-- Amazon.com
111 pages, Kindle Edition
First published May 12, 2013
131 people are currently reading
4837 people want to read
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Displaying 1 - 27 of 27 reviews
July 6, 2019
Very interesting concept about how to outperform the market. Since I am a big fan of dividend paying stocks, I liked the broader idea about shareholder’s yield (which is defined as dividends+share buyback + debt repayment). Definitely this book encouraged me to look more in to this topic
February 2, 2019
Simple Concepts, Clearly and Concisely Presented
Faber demonstrates his clear thinking, by explaining things with no more jargon than necessary. I'd imagine this was primarily extracted either from quarterly reports he wrote, or an internal handbook he wrote for new recruits working with him.
Some really smart investment knowledge.
A company reducing its debt, is just as good as a company paying dividend in the same amount. Not obvious.
Faber demonstrates his clear thinking, by explaining things with no more jargon than necessary. I'd imagine this was primarily extracted either from quarterly reports he wrote, or an internal handbook he wrote for new recruits working with him.
Some really smart investment knowledge.
A company reducing its debt, is just as good as a company paying dividend in the same amount. Not obvious.
May 16, 2021
As usual with Meb Faber's books, he's concise and goes straight to the point of demonstrating - with data - how companies with high shareholder yield have historically outperformed the others.
In short, he defines shareholder yield as the combination of:
- cash dividends
- stock buybacks
- debt reduction
In short, he defines shareholder yield as the combination of:
- cash dividends
- stock buybacks
- debt reduction
February 25, 2025
A worthwhile read for those interested in dividend investing as it explores the potential of achieving greater returns by combining dividends with share repurchases and reduction of corporate debt, factors that combine to create a yield greater than their parts. The author includes research and reports backing his assertions.
September 17, 2017
Finished August 5, 2017. Readability 9. Rating 6. Another good reminder - shareholder yield is a good indicator of quality and drives good returns. Worth Factoring in. Not quite as interesting as the asset allocation book, but still useful.
May 28, 2022
Great read especially good data points. Points to note: dividend yield, net buyback, debt pay down, payout ratio, debt to asset and debt to equity. Quick pointer: I found a shareholder yield excel list updated periodically in suredividend.com if anyone is interested.
October 3, 2025
Even though this book is a little older a lot of the information was still good to help a novice like myself to understand dividend investing. Granted some of the topics are still over my head so it will require multiple reads to better absorb and understand the info.
August 28, 2023
Quick and interesting.
December 7, 2024
Great quality of information in such a short read. First investing book I’ve read in a while that’s a bit more updated.
March 26, 2025
Thanks for picking me as a giveaway winner.
June 22, 2025
Must read for those that think buybacks are evil or think a 1% excise tax on buybacks makes economic sense.
November 20, 2024
The most valuable morsel of information that I learned from this book is that prior to the early 80's, it was NOT illegal for companies to buy back shares. I've heard from many left wing commentators that is was illegal to do so prior to Reagan, and I always assumed that they were correct. Turns out, companies have been repurchasing shares for hundreds of years.
I enjoyed learning more about buybacks and shareholder yield. The book describes the theory behind the funds offered by Cambria.
Another book that I recently read, 'The Big Secret for the Small Investor' by Joel Greenblatt, also discusses actively managed index funds. Mr. Greenblatt encourages investors to buy and hold "value weighted index funds." In chapter seven of Mr. Faber's book, he found that, historically, the shareholder yield portfolio that performs best is the one that has a value tilt. One method he mentions that can accomplish this is by eliminating the top half of the most expensive stocks (by p/e ratio) and investing in the cheaper bottom half. However, what is left is then equally weighted. Based on what I read in Mr. Greenblatt's book, I do wonder if Mr. Faber's equally weighted shareholder yield portfolio could be improved upon by taking the stocks selected after screening for shareholder yield criteria, and then building the index by weighting heavily those stocks that are priced at the largest discount to various measures of value (value weighted index) instead cutting off the top most expensive half and equally weighting what is left.
I enjoyed learning more about buybacks and shareholder yield. The book describes the theory behind the funds offered by Cambria.
Another book that I recently read, 'The Big Secret for the Small Investor' by Joel Greenblatt, also discusses actively managed index funds. Mr. Greenblatt encourages investors to buy and hold "value weighted index funds." In chapter seven of Mr. Faber's book, he found that, historically, the shareholder yield portfolio that performs best is the one that has a value tilt. One method he mentions that can accomplish this is by eliminating the top half of the most expensive stocks (by p/e ratio) and investing in the cheaper bottom half. However, what is left is then equally weighted. Based on what I read in Mr. Greenblatt's book, I do wonder if Mr. Faber's equally weighted shareholder yield portfolio could be improved upon by taking the stocks selected after screening for shareholder yield criteria, and then building the index by weighting heavily those stocks that are priced at the largest discount to various measures of value (value weighted index) instead cutting off the top most expensive half and equally weighting what is left.
December 25, 2016
This short book (essay) is clear, well-presented and understandable. If you found this book, you are probably familiar with Meb. I encourage you to listen to his podcast (ranked in the top 5 investing podcasts by wsj) and visit his website. He has free white papers and articles on his website that probably explain the concepts. Additionally, occasionally he makes his books available for free, which is how I obtained this book.
I think the book is around 8 short chapters. The first lays out the case for dividends being a large part of a stocks performance. By chapter 3, he is explaining that since 1982, American companies have begun repurchasing shares more and more, and how repurchases should be considered part of yield. He then moves on to debt retirement as another form of yield.
I would never attempt to implement this strategy myself, but I am pretty sure that Cambria offers an ETF that implements this strategy of shareholder yield while also considering momentum and value.
A nice read.
I think the book is around 8 short chapters. The first lays out the case for dividends being a large part of a stocks performance. By chapter 3, he is explaining that since 1982, American companies have begun repurchasing shares more and more, and how repurchases should be considered part of yield. He then moves on to debt retirement as another form of yield.
I would never attempt to implement this strategy myself, but I am pretty sure that Cambria offers an ETF that implements this strategy of shareholder yield while also considering momentum and value.
A nice read.
October 21, 2015
SYLD Good place to look for great managers
Not surprisingly, a basket of the highest total yielding stocks, including div and share repurchase and debt pay down, does better over time than broader s&p. Yield is measured on mkt cap, so you are getting the highest return on equity business at the moment you buy. You are buying "deals." Eventually the market recognizes the superb quality of the business and raises its price, delivering you an above avg return.
It's unclear why this hasn't been arbitraged away - traders should buy the great businesses that pay out more money, drive up the prices, such that their current yields at those higher prices match the overall s&p. Perhaps such a trade is difficult bc a big portion of the money returned is through repurchases and these are done opportunistically and unpredictably by mgmt at a time when the price is lower that fair value. The correction to fair value takes time.
Not surprisingly, a basket of the highest total yielding stocks, including div and share repurchase and debt pay down, does better over time than broader s&p. Yield is measured on mkt cap, so you are getting the highest return on equity business at the moment you buy. You are buying "deals." Eventually the market recognizes the superb quality of the business and raises its price, delivering you an above avg return.
It's unclear why this hasn't been arbitraged away - traders should buy the great businesses that pay out more money, drive up the prices, such that their current yields at those higher prices match the overall s&p. Perhaps such a trade is difficult bc a big portion of the money returned is through repurchases and these are done opportunistically and unpredictably by mgmt at a time when the price is lower that fair value. The correction to fair value takes time.
July 19, 2013
Rather short but to the point. Mr. Faber continues to discuss his quantitative investing methods in a readable fashion, albeit academic in nature. It does borrow heavily from concepts in published papers and provides ample opportunity for additional self research. The investing approach is simple and appears fruitful but is harder to implement than his Ivy Portfolio book due to the cost of acquiring the necessary data on an ongoing basis.
July 22, 2013
A very brief book that reviews a number of academic studies on improving investment performance through a study not just of dividend yield but an examination of capital allocation and total growth of shareholder value.
Not as easy to implement as the Ivy League Portfolio by this same author. But it does provide investors with some ways to grow performance.
Not as easy to implement as the Ivy League Portfolio by this same author. But it does provide investors with some ways to grow performance.
March 29, 2015
how to beat the market
Great summary and strategic review of the new way to find yield. Meb explains how companies use cash to benefit the shareholder in 3 ways. 1. Dividends 2. Share repurchases 3. Debt pay down
By combining these three metrics you can beat a simple dividend portfolio which normally beats a vanilla index fund
Great summary and strategic review of the new way to find yield. Meb explains how companies use cash to benefit the shareholder in 3 ways. 1. Dividends 2. Share repurchases 3. Debt pay down
By combining these three metrics you can beat a simple dividend portfolio which normally beats a vanilla index fund
May 16, 2019
An oldie but goodie
This is an easy to understand exploration of the advantages of investing in dividend paying stocks. It extends the concept of returning money to shareholders to include stock buybacks and debt reduction.
This is an easy to understand exploration of the advantages of investing in dividend paying stocks. It extends the concept of returning money to shareholders to include stock buybacks and debt reduction.
December 8, 2015
Not a book
Lots of good information. But it's can be considered a collection of research. Not very long. I'm not sure it's worth the price of your familiar with Meb's work and his associates.
Lots of good information. But it's can be considered a collection of research. Not very long. I'm not sure it's worth the price of your familiar with Meb's work and his associates.
November 29, 2016
Love this short book (should have been a single article/blog post though) because it introduces another quant parameters which if used above traditional dividend yield, generate a very smart alpha. This can read in a single sitting, so saves your time as well.
July 1, 2025
Won this book in a giveaway, it is very specific to a targeted audience which would be someone who perhaps owns a bank or a similar asset. I failed to see any value in it but it may be of valued to its intended audience. This book is not for investing beginners
September 9, 2015
Very informative and a logical (though not obvious) way of thinking of stock distributions.
March 19, 2015
Higher level investment book but very interesting. Worth reading if you have a little more background in the subject.
July 28, 2015
Really like Meb's writing and research style. This book was great. Good info and just the right length to get his message across.
June 3, 2016
It's Meb Faber. It's only 55 pages.
Mr.Faber never disrespects or wastes your time.
This one is no exception.
Stop thinking and just read it.
Mr.Faber never disrespects or wastes your time.
This one is no exception.
Stop thinking and just read it.
November 10, 2016
Share buy backs, debt pay down is something to watch out. More so than dividend payout ratio on a standalone basis. Good, simple, easy read.
December 7, 2018
Enlightening perspective
Important analysis contained here for the investor who may be vulnerable to the advisors and internet marketers who bait them with yield chasing.
Important analysis contained here for the investor who may be vulnerable to the advisors and internet marketers who bait them with yield chasing.
Displaying 1 - 27 of 27 reviews