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Shareholder Yield: A Better Approach to Dividend Investing [Kindle Edition]

Mebane Faber
4.2 out of 5 stars  See all reviews (80 customer reviews)

Print List Price: $9.99
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Book Description

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"?


Product Details

  • File Size: 1045 KB
  • Print Length: 55 pages
  • Publisher: The Idea Farm; 1 edition (May 12, 2013)
  • Sold by: Amazon Digital Services, Inc.
  • Language: English
  • ASIN: B00CRLSL4W
  • Text-to-Speech: Enabled
  • X-Ray:
  • Word Wise: Enabled
  • Lending: Enabled
  • Amazon Best Sellers Rank: #172,955 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Customer Reviews

Most Helpful Customer Reviews
74 of 77 people found the following review helpful
3.0 out of 5 stars Illuminating and unworkable, maybe. June 2, 2013
Format:Kindle Edition|Verified Purchase
I'm just an average retail investor, not the sophisticated financial analyst that the author is, so I might have some things wrong here. But, here goes..

The book is a fairly quick read though I did take the time to think about things as I went along and re-read sections to make sure I thought I understood it. The author's main point is that companies return value to shareholders through multiple means: dividends, share buybacks, debt paydown, and investments and aquisitions. He concentrates on the first three, but mentions and then drops the last one. He makes note that due to changes in a 1982 law, more companies are returning value to shareholders by share buybacks, which needs to be taken into account to get a fuller picture. Also, value is returned to shareholders in the paying down of debt, which increases shareholder claims on future earnings. I think I'm getting this right. I found this discussion to be quite illuminating and I started feeling that I really needed to be taking those aspects into account when choosing my purchases. I don't know why he first mentions shareholder returns due to investments and aquisitions and then goes completely silent about those. It left me wondering.

By the end of the book, I was looking forward to trying some of the screens that he suggested in the last chapter. I visited 3 of the, I believe, 4 websites that he said screened for shareholder yield (dividend yield + net buyback yield + net debt paydown yield.) First I went to the Turnkey Analyst website. They have a screener but it is completely opaque and certainly does not screen for Shareholder Yield by itself. Then I went to ValueInvesting.eu. That does have a Shareholder Yield (in name) screener but doesn't include the Net Debt Paydown Yield component.
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17 of 18 people found the following review helpful
5.0 out of 5 stars Recommended May 30, 2013
Format:Kindle Edition|Verified Purchase
This is a review of Shareholder Yield: A Better Approach to Dividend Investing by Mebane Faber, a well-written book packed with information, more of a White Paper really, which took me less than an hour to finish.

It starts with a hilarious poem about the six wise men from Indostan, each of whom perceives one aspect of the elephant & mistakes it for the whole. (A very minor quibble: the story comes from the Jain tradition, not Hindu or Buddhist.)

The main conclusion of the book is that a portfolio consisting of stocks screened for high "Shareholder Yield" outperforms the markets (has a positive Alpha, in industry parlance) - without taking on additional risk (at least as measured by standard deviation of returns). Shareholder Yield is defined as the sum of three factors: dividend yield, net share buybacks (buybacks minus new stock issuance) and net debt pay-down. The author systematically walks us through each of these three factors and presents evidence that each factor individually adds Alpha to the portfolio. And to top it off, he presents evidence that combining the three factors outperforms each of the three individual factors.

The introduction quotes Warren Buffett that the main financial job of a CEO is allocating capital. That is the whole idea behind this book as well, from the perspective of an investor looking to outperform the market. The three aforementioned factors are the levers that a CEO has to return value to the shareholder by way of allocating capital.

The data presented are only from 1982 to 2012, a relatively short time-period for measuring the success of an investment strategy. This is mainly because a key law was changed in 1982, which led to share buybacks becoming more and more popular tools for capital allocators.

Overall the book is highly recommended for a short and concise presentation of a focused investment strategy.
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20 of 25 people found the following review helpful
5.0 out of 5 stars Great quick read May 14, 2013
Format:Kindle Edition|Verified Purchase
Good and thorough explanation of fairly complex topic. I highly recommend this book both for individual investors and investment professionals. Great supporting documentation and links to other research.
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4 of 4 people found the following review helpful
5.0 out of 5 stars Fresh way to look at investing May 21, 2013
Format:Kindle Edition|Verified Purchase
Meb Faber is definitely continuing his fresh views on ways to invest. The Ivy Portfolio changed my views on long-term investing and this book has also made me see things in a new light. I'd always known that dividends make up the majority of returns over time, but it was interesting to see how this can be improved upon by adding share buybacks and other metrics. Definitely worth a read as shareholder yield is a subject gaining momentum on Wall Street as an "up and coming" strategy.
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2 of 2 people found the following review helpful
5.0 out of 5 stars intelligent investment research April 27, 2014
By Deuce
Format:Kindle Edition|Verified Purchase
Mebane Faber is a wicked smart dude. His approach to investing is rational. If your looking to safely compound your wealth for long periods of time, this book is for you.
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2 of 2 people found the following review helpful
Format:Paperback|Verified Purchase
I try to read everything Meb Faber writes. He is a tireless researcher of asset allocation strategies and extremely generous at sharing his findings. Shareholder yield is a way of modifying dividend strategies to include the tendency of companies to buy back their own shares instead of or in addition to paying dividends. Faber demonstrates how useful it is to use this measure for evaluation of stock performance. My only complaint is I wish the book was bigger and could go much further. But the price is almost nothing and cheap at that price.
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2 of 2 people found the following review helpful
5.0 out of 5 stars Insightful March 29, 2014
Format:Kindle Edition|Verified Purchase
MeV Faber lays out an interesting and salient way for investors to examine a different component of total return. Well worth perusing.
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Most Recent Customer Reviews
3.0 out of 5 stars lesson lesrned.
Reinvestment causes growth you will love.
Published 5 days ago by Amazon Customer
3.0 out of 5 stars Three Stars
Interesting idea, but hard to get the data to put it into practice.
Published 25 days ago by Charles Martin
5.0 out of 5 stars I have not only purchased the book but have purchase ...
I have not only purchased the book but have purchase a couple of the ETFs that the Company has developed. We are doing well on one but the European fund is "limping". Read more
Published 2 months ago by Joe
4.0 out of 5 stars We written with lots of data to back up premise
I enjoyed this book. Mr. Faber makes a solid case for this investing style. It is not an overt plug for his Cambria Funds ETF - Shareholder Yield (SYLD) but should be. Read more
Published 3 months ago by David
5.0 out of 5 stars This book does a great job pointing out that dividend yield is only...
This book does a great job pointing out that dividend yield is only one way a company gives back to shareholders. Read more
Published 4 months ago by Debra Mayne
5.0 out of 5 stars Learn about dividend investing here.
Great read
Published 4 months ago by Marc@Lake Panorama
2.0 out of 5 stars I would rather propose you to read the "Global value" ...
I would rather propose you to read the "Global value" from the same author. I read that book before "Shareholder Yield" and had quite high expectations as the... Read more
Published 5 months ago by Tommy
4.0 out of 5 stars Another succinct thesis
Faber always has a great balance of statistical rigor and compelling story. Shareholder Yield is no exception. This is not a how-to guide, though. Read more
Published 5 months ago by Todd Foster
1.0 out of 5 stars One Star
don't remember ever getting this
Published 6 months ago by customer
5.0 out of 5 stars Recommended
This was recommended reading, and I'm so glad!
Published 6 months ago by Amazon Customer
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More About the Author

Mr. Faber is a co-founder and the Chief Investment Officer of Cambria Investment Management. Faber is the manager of Cambria's ETFs, separate accounts and private investment funds. Mr. Faber has authored numerous white papers and three books: Shareholder Yield, The Ivy Portfolio, and Global Value. He is a frequent speaker and writer on investment strategies and has been featured in Barron's, The New York Times, and The New Yorker. Mr. Faber graduated from the University of Virginia with a double major in Engineering Science and Biology.

www.cambriafunds.com

www.mebfaber.com


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