O’Shaughnessy Asset Management explores shareholder yield as a more complete lens for evaluating equity returns, combining dividends, buybacks, and debt reduction to better capture how firms return capital. The paper argues traditional dividend-focused strategies miss a large portion of total yield and highlights that buybacks above 5% often signal stronger outcomes.
The Factor Archives: Shareholder Yield
O’Shaughnessy Asset Management
Jamie Catherwood
Research
7 Pages
Key Takeaways
Beyond Dividends Alone: Dividends historically explain over 50% of equity returns, but adding buybacks and debt reduction creates a more complete yield measure with broader return drivers.
High Conviction Buybacks: Companies repurchasing over 5% of shares annually have shown stronger excess returns, with historical spreads reaching roughly 3.3% between cheap and expensive repurchasers.
Value And Yield Combo: Large cap firms combining high shareholder yield with low valuations delivered returns as high as 15.2% versus 8.7% for less attractive counterparts.
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