BBY Investments builds model portfolios around buyback yield — the overlooked dimension of equity income that most income strategies consistently miss.
Each strategy scans the S&P 500 for companies with meaningful, sustained shareholder returns — merging dividend yield and buyback yield into a unified total yield framework. The result is a portfolio that has historically outpaced the broad market and leading high-dividend benchmarks alike.
S&P 500 constituents with a buyback yield exceeding 1% in no fewer than 4 of the prior 5 years — applying the consistency logic of dividend achievers to total shareholder yield. Individual positions capped at 10% of market weight.
Companies that sustain repurchase programs year over year signal the same financial discipline as dividend achievers — robust free cash flow, prudent capital allocation, and a proven commitment to shareholder returns. This consistency-driven screen targets businesses capable of maintaining capital return programs across full economic cycles, not just during peak earnings periods.
S&P 500 constituents with positive buyback yields in at least 2 of the last 3 years, then narrowed to the top half by combined dividend and buyback yield. Individual positions capped at 10% of market weight.
Companies that return the greatest total capital to shareholders — through dividends and repurchases combined — tend to be characterized by genuine capital efficiency and limited appetite for speculative deployment. By targeting total yield rather than dividends in isolation, this strategy captures businesses that prioritize shareholder returns regardless of whether the vehicle is buybacks or dividends.
Past performance is not indicative of future results. Returns shown are based on a 20-year backtest of rules-based index screens applied to the S&P 500. Yield figures are current estimates and subject to change.
Dividend yields across public equities have declined sharply over the past four decades. Yet total returns to shareholders have held steady — because companies have steadily redirected capital from dividends toward share repurchases. Investors who gauge equity income by dividend yield alone have watched income investing appear increasingly constrained as a result.
A pro rata participation in a share buyback is economically equivalent to receiving a dividend. Your ownership stake is preserved and you receive cash. Buyback yield is equity income.
When a company repurchases shares, investors who tender their proportional share receive cash while retaining the same fractional ownership — the defining feature of a dividend payment. The cash return is real; only the delivery mechanism differs. Excluding buyback yield from an equity income strategy is like assessing a company's revenue while omitting half its sales.
Index funds already capture buybacks automatically when they rebalance. The BBY Investments approach makes this yield explicit — treating it as distributable income rather than silently embedding it in price appreciation, and screening specifically for companies with durable, consistent shareholder return programs.
The following shows both BBY strategies' current total yields, broken out between their dividend yield and buyback yield components.
Dividend and buyback yield split is estimated. Actual allocation varies by quarter.
Dividend and buyback yield split is estimated. Actual allocation varies by quarter.
Our strategies are designed for RIAs seeking differentiated equity income approaches that can outperform traditional dividend-only mandates without crowding into an ever-narrowing pool of high-yield payers.
Both strategies have beaten the S&P 500 across 20-year backtested periods.
Total yield accounts for both dividends and buybacks — reflecting how companies actually distribute capital today.
Offer clients access to a strategy unavailable through conventional investment products.
Provided as quarterly model rebalancing spreadsheets under a model licensing agreement. No complex setup required.
We partner with RIAs on a model licensing basis. Reach out to explore our strategies and how they can complement your existing SMA platform.
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