BALTIMORE (Stockpickr) -- We've all heard the old story of equity market returns: averaged across the long run, the stock market pays out a solid 10% return each year. But that's chump change.
By focusing on just three simple metrics this year, you could nearly double those average gains. Best of all, you could do it at the exact same time that momentum names are losing steam this month.
So what the secret sauce I'm talking about? It's shareholder yield.
Shareholder yield focuses on measuring the three ways that a company can return cash to its shareholders. Yes, that includes obvious moves like dividends -- but it also includes share buybacks and paying down debt.
Translation: shareholder yield is made up of anything that directly returns cash or equity to your portfolio.
Any of those three corporate actions can unlock significant value for shareholders, and the data backs it up. According to research by James O'Shaughnessy, over a 40-year period, large-cap stocks with the highest shareholder yield delivered average gains of 18.05%. That's almost double the returns that investing in the vanilla big index would have earned you.
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.
With that in mind, here's a look at five names that have provided superior shareholder yield in the last year.