Corporate America is giving back, bolstering shareholder returns through a record amount of dividends and buybacks. Investors can also target these companies through exchange traded funds that track share repurchases and dividend growth themes.
Over 2014, S&P 500 companies issued a record $900 billion in total buybacks and dividends, compared to the previous record $846 billion in 2007, and second-place $787 billion in 2013, reports John Melloy for CNBC.
“The theme for Q4 and 2014 continues to be shareholder return,” Howard Silverblatt of S&P Dow Jones Indices said in the article.
A record $92.8 billion in dividends was issued over the past quarter. Meanwhile, buybacks posted their second-best year ever, falling just shy of the $589 billion record in 2007.
Investors who are interested in the buyback theme as a way to bolster shareholder returns have a few options available. For instance, the PowerShares Buyback Achievers Portfolio (NYSEArca: PKW) includes U.S. companies that have effected a net reduction in shares outstanding by 5% or more over the trailing 12 month period. Additionally, the TrimTabs Float Shrink ETF (NYSEArca: TTFS) and the Cambria Shareholder Yield ETF (NYSEArca: SYLD) both include companies that return capital to shareholders through stock repurchases. [Buyback ETFs Notch Another Solid Year]
ETF investors can also follow companies that have consistently increased dividends over the years. For example, the Vanguard Dividend Appreciation ETF (NYSEArca: VIG) tracks U.S. stocks that have increased dividends on a regular basis for at least 10 consecutive years. [Stock ETFs & Fixed-Income Yield Spread Paints Bullish Picture]