Thriving on the Dividend and Buyback Diet  

Oleh:

Tully, Shawn

Jenis: Article from Bulletin/Magazine
Dalam koleksi: Fortune vol. 167 no. 3 (Feb. 2013), page 19-20.
Topik: Dividend; Buybacks; Shareholders; Stock Market; Investment Management

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Perpustakaan Pusat (Semanggi) Nomor Panggil: FF16 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Why it's more important than ever to focus on the dividends and buybacks that companies return to shareholders. Dividend-paying stocks have generated intense debate in recent years. Has the rising market made their prices too high and their yields too low -- or is a dividend-heavy portfolio still the best way to garner superior returns? For Chris Brightman, that discussion misses the point. Brightman is the head of investment management at Research Affiliates, an investing think tank that devises and licenses indexes that are used to manage $70 billion in ETFs and mutual funds, including funds sold by Schwab (SCHW) and PowerShares. Brightman sees dividends as a key metric -- but not the sole one. His latest brainstorm is a value-oriented methodology that screens not only for dividends but also for the impact of stock buybacks. In theory, when a company reduces its number of shares by, say, 2% while keeping profits and the price/earnings ratio steady, it should translate to a 2% increase in stock price. So Brightman adds the percentage of shares repurchased to the dividend yield percentage to calculate what he calls "total yield." He argues that stocks with the highest total yields are far and away the best buys on the market.

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