Are Buybacks An Oasis Or A Mirage? – ValueWalk Premium
Buybacks

Are Buybacks An Oasis Or A Mirage?

Key Points

  1. In 2014, the S&P 500 Index’s dividend (1.9%) + buyback (2.9%) yield = 4.8%, but this yield was not realized by investors.
  2. As in most years, in 2014 issuance of new shares—for management compensation, new investments, and funding mergers and acquisitions—exceeded buybacks.
  3. The dilution rate for the U.S. equity market in 2014 was 1.8% compared to the historical dilution rate of 1.7% over the 80-year period from 1935 to 2014.
  4. U.S. equity investors in aggregate . . .

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