Dividend Investment Strategy: Price momentum and shareholder yield

The price momentum and shareholder yield strategy is a investment strategy which combines rising investment prices with dividend yield and buy back yield also called shareholder yield.

For example if a business stock price is rising for the last six months and it has a yield of 2 percent and the business buy’s 6% of its shares on the market it will have a shareholder yield of 8%.

The shareholders yield shows how much of a business cash flow is being returned to the shareholders, the higher shareholders yield the higher the investment return has been for investors. The price momentum and shareholder yield strategy has outperformed the markets for decades, with less volatility than the markets. The strategy turned $ 10.000 in 1927 in to $ 1,8 miljoen in 2009.

The price momentum and shareholder yield strategy works based on the following rules; first the stocks have to be in uptrend. From that list the 25 stocks with the highest “shareholder yield” are selected. Based on these criteria the portfolio is adjusted on a set timeframe. If you don’t want to do the work yourself you can buy the Cambria Shareholder Yield Fund (NYSE: SYLD), which follows this strategy.