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TheStreet Open House

5 Shareholder Yield Stocks to Beat the S&P

Stocks in this article: HPQATVIDEGPSBBBY


BALTIMORE (Stockpickr) --Dividends are so 2013. There's a different payout metric you should be using this year: shareholder yield.

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January was a wakeup call for any investors who'd eschewed dividend payouts in favor of capital gains. Oh yeah, stock gains don't always ring in like clockwork, do they? Suddenly, the value that firms can pay shareholders directly mattered again. The problem is that a stock's dividend yield just doesn't tell the whole story.

For real market beating returns, you've got to look at "shareholder yield."

Shareholder yield focuses on measuring all the different ways that a company can return cash to its shareholders. Yes, that includes dividends -- but it also includes share buybacks and paying down debt.

In a nutshell, shareholder yield is made up of moves that directly return cash or equity to your portfolio.

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Any of those three corporate actions can unlock significant value for shareholders, and the data backs it up. According to research by Cambria Investment Management CIO Mebane Faber, shareholder yield historically generates bigger returns than dividends alone. Much bigger returns.

With low interest rates and record levels of cash sitting on corporate balance sheets, management teams are looking for the most effective ways to return value to shareholders. It's not one size fits all, either. The best mix varies from company to company. But by looking at the trifecta of dividends, buybacks and debt extinguishment, you can be sure that you won't miss out on any of the proceeds.

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With that in mind, here's a look at five names that have provided superior shareholder yield in the last year.

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