Net Common Buyback Yield

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Definition

Buyback Yield is the repurchase of outstanding shares over the existing market cap of a company. If a company purchased 50 million dollars worth of its own stock and its market cap was 500 million, the buyback yield would be 10%.

Companies with large buyback yields should be investigated closely. It could be signs of positive stock appreciation, management expectations that the stock is undervalued, attempts to thwart a hostile takeover, management's favorable response to shareholders, among other reasons.

Both stock buybacks and dividends are considered shareholder payouts.

Formula

YCharts calculates buyback yield as the net equity issued over the last twelve months divided by the market capitalization of the company. For instance, if a company has purchased 50 million dollars worth of its own stock and its market cap was 500 million, the buyback yield would be 10%.

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