Shareholder Yield vs. Dividend Yield
Most investors would be familiar with dividend yield. It is simply the notional amount of dividend issued by the company divided by its market capitalization. It is often easier to calculated dividend yield on a per-share basis.
For example, if a company pays a dividend of $1/share and its current share price is $100/share, this company has a dividend yield of $1/$100 = 1%.
A shareholder yield is a ratio that shows how much the company is sending back to shareholders through a combination of dividend payments as well as share repurchases.
Shareholder yield provides a more complete “picture” vs. dividend yield when evaluating if shareholders’ return is positive. What exactly do I mean by that?
Shareholders are often only interested in dividend payments which is a DIRECT manner of returning capital to shareholders as this is money that a shareholder can “feel and touch”....