Shareholder yield

Capital returns

Total cash returned to shareholders — dividends plus buybacks — as a percentage of market cap.

Formula

Shareholder yield = dividend yield + buyback yield

Why it matters

Companies choose different mixes of dividends and buybacks for tax and flexibility reasons, so comparing either alone across companies is misleading. Shareholder yield adds them together into the single number that matters: how much cash, in total, went from the company to its owners last year relative to the price you pay today. It makes an apples-to-apples comparison possible between a dividend payer and a heavy repurchaser, and it can be compared directly against bond yields.

What good looks like

Above 5% is a substantial return of capital. 2–5% is typical for mature, disciplined companies. A shareholder yield above the 10-year Treasury yield, from a company that can also grow, is a demanding but useful hurdle. Zero is fine for a fast grower with better internal uses for the cash.

Caveats

The measure includes gross buybacks, so SBC-heavy companies overstate the true return to owners. It also says nothing about sustainability — check the FCF payout ratio: a big shareholder yield funded by borrowing rather than free cash flow is a withdrawal from the balance sheet, not a return on the business. Debt paydown, a third genuine use of owner cash, is not captured here.