The S&P 500 dividend yield just hit an all-time low of 1.08%, the lowest since the 1800s.
The prior low was 1.1% in 2000.
Did you know there are “dividend” mutual funds with negative yields (their expense ratios exceed their dividend yields)?!
On the other hand, stock buybacks have exceeded dividends since the late 1990s. And yet, nearly all stock funds still focus solely on dividends, which is crazy. (And it’s not just about the buybacks, but also the share issuance!)
Buffett’s been talking about this more than anyone for decades… We wrote Shareholder Yield on the topic 13 years ago, and the 2nd edition is free online.
As you review last weekend’s Berkshire meeting, and gasp at the $400 billion in cash on their balance sheet, understand why they consistently choose buybacks over dividends…
Do we see sub 1% yields?!
Chart: Multpl
