by Chad Shoop
The Sovereign Investor
When I search for new stocks for investment yield, there’s one data point I always take a look at: the company’s ability to return capital to shareholders.
It’s one of the most important pieces of information to consider when looking for stable, dividend-paying stocks. Essentially, I want to see if the company has the wherewithal to pass cash flow back to shareholders, thereby increasing our wealth in the process.
There are several ways companies can accomplish this, with paying a dividend being the most direct method.
One common method of returning shareholder value — share buybacks — may be stalling out. While this may seem somewhat innocuous, the decline in stock buybacks may be a sign that we could be entering the next stock market recession any day now.