You would have heard of dividend yield, which measures how much a company pays out in dividend compared to the share price. However, not many would have heard about the term “buyback yield”. Buyback yield is the dollar amount of buyback done by the company compared to the existing market capitalization of the company. Buyback yield can serve as hidden dividends – not obvious to the market but can create huge catalyst for a rise in stock price. Both the dividend yield and buyback yield can be added up to give a “cumulative yield”.
High buyback yield is usually a result of high free cash flow (which is the operating cash flow minus the capital expenditure) in a company. A company can do a few things when it has free cash flow. ...
You would have heard of dividend yield, which measures how much a company pays out in dividend compared to the share price. However, not many would have heard about the term “buyback yield”. Buyback yield is the dollar amount of buyback done by the company compared to the existing market capitalization of the company. Buyback yield can serve as hidden dividends – not obvious to the market but can create huge catalyst for a rise in stock price. Both the dividend yield and buyback yield can be added up to give a “cumulative yield”.
High buyback yield is usually a result of high free cash flow (which is the operating cash flow minus the capital expenditure) in a company. A company can do a few things when it has free cash flow. ...
