Free Cash Flow and Shareholder Yield looks to first define what shareholder yield is and what it can do for both the institutional and individual investor. The authors define shareholder yield as a concept that uses an analysis of free cash flow deployment to gauge the investment worthiness of a company. Free cash flow analysis allows a company to decide how it wants to spend its free cash, either through cash dividends, share repurchases, debt pay downs, internal re-investment projects, or acquisitions. The authors argue that today cash, and the way in which companies choose to spend it, provides the most meaningful gauge of a company’s financial and operational health. In fact, few investors realize that cash flow has eclipsed earnings as the most useful benchmark for security selection and business management. Free Cash Flow and Shareholder Yield aims to show investors the importance of both Shareholder Yield and free cash flow, especially in the context of rising interest rates and globalization (with the introduction of new global players such as China, India and Russia).
Book Details:
- Author: William W. Priest
- ISBN: 9780470128336
- Year Published: 2007
- Pages: 192
- BISAC: BUS036000, BUSINESS & ECONOMICS/Investments & Securities / General
About the Book and Topic:
Free Cash Flow and Shareholder Yield looks to first define what shareholder yield is and what it can do for both the institutional and individual investor. The authors define shareholder yield as a concept that uses an analysis of free cash flow deployment to gauge the investment worthiness of a company. Free cash flow analysis allows a company to decide how it wants to spend its free cash, either through cash dividends, share repurchases, debt pay downs, internal re-investment projects, or acquisitions. The authors argue that today cash, and the way in which companies choose to spend it, provides the most meaningful gauge of a company’s financial and operational health. In fact, few investors realize that cash flow has eclipsed earnings as the most useful benchmark for security selection and business management. Free Cash Flow and Shareholder Yield aims to show investors the importance of both Shareholder Yield and free cash flow, especially in the context of rising interest rates and globalization (with the introduction of new global players such as China, India and Russia).
In todays changing world of globalization, increasing interest rates, and new investment techniques, many investors do not even realize they are being slowed down and held back by old and even outdated investment paradigms. Specifically speaking, recent economics trends and market activity have made certain accounting metrics, such as P/E and Price/Book Value, ineffective signifiers of positive equity returns. Todays investor needs to begin to focus on free cash flow analysis, specifically through its application in the form of Shareholder Yield.
AN EPOCH INVESTMENT: Author William Priest and his company, Epoch Investment Partners, are well-known for their sharp investment policies. In fact, Epoch’s flagship portfolio has rung up an annualized 17.2% for the past three years, compared to 11.2% for the S&P’s 500. Please see attached Barron’s article featuring Priest and Epoch. A NEW WAY OF THINKING: Free Cash Flow and Shareholder Yield offers informed investors a new way of gauging the investment worthiness of company. More and more investors are realizing that old accounting metrics (P/E and Price/Book Value) are outdated. The concept of Shareholder Yield will allow them to focus on cash flow, which is now regarded as the most useful benchmark for business management. WHAT IS SHAREHOLDER YIELD: Shareholder Yield is defined as a concept that uses free cash flow analysis to determine how financially worthy a company is. Free cash flow analysis allows a company to decide how to spend its available money (either through acquisitions or debt payments, etc.). EPOCH SUPPORT: Epoch will support the book through web site promotion (http://www.eipny.com) and e-mail blasts to clients. Epoch manages about $3.5 billion in assets. Priest has also promised that Epoch will purchase 5,000 books to distribute to clients.
About the Author
William W. Priest (New York, NY) has more than 40 years of experience in the investment management industry. Before forming EPOCH Investment Partners in June 2004, he was Co-Managing Partner and Portfolio Manager at Steinberg Priest s leading specialists communications consultancies. At Financial Dynamics, McClelland created and implemented investor relations and corporate communications platforms for several top companies in the Basic Industries and Business Services sectors.