The "total" yield of a company combines the dividend yield and the buyback yield - that is the yield boost from reducing the total amount of shares outstanding. Together with S&P's Howard Silverblatt, Barron'sputs together a list of the top 20 companies in the S&P 500 based on "total" yield.
While buybacks don't guarantee a strong stock - witness consistent buyback champs like IBM and Kohl's (NYSE:KSS) - Warren Buffett goes to bed at night praying for IBM's share price to go down so the company can buy back more stock for a given dollar amount (though The Oracle has said he doesn't expect this logic to win many fans).
The flip-side are those companies - financials and energy come to mind - who tend to buy back stock at high prices only to find themselves forced to reissue it at lower prices when times get tough. A consistent plan helps, and Travelers (NYSE:TRV), under CEO Jay Fishman, has been maybe the best example of this - halving the share count since the end of 2006.
ETFs? The Powershares Buyback Achievers Portfolio (NYSEARCA:PKW) gained 45.6% in 2013, 1,300 basis points better than the S&P 500. Since inception in 2006, it's up an annualized 9%, more than 200 basis points better than the S&P. A newcomer - the Cambria Shareholder Yield ETF (NYSEARCA:SYLD) - has beaten the S&P by about 250 basis points since its May 2013 inception.
Property & casualty insurers are bouncing from a tough Friday session which was led by declines in Chubb and Cincinnati Financial after tough Q1 results. Today's biggest gainer is United Insurance Holdings (UIHC +4.8%) - continuing a big run after being initiated with an Outperform rating at Wells Fargo.
Aren't insurers supposed to be bought after a tough quarter for catastrophes as it means they can raise rates?
The Dow being a price-weighted index, one of the arguments for keeping Apple out of it has been its towering stock price. The announced 7:1 split will cut the shares to the $80 range - a more reasonable level for that index.
It's pure speculation, but who might be removed to make room? By a wide margin, Travelers (TRV) is the smallest market cap in the DJIA.
Operating income of $2.68 per share compares to $0.72 a year ago thanks to lower catastrophe losses ($53M during Q vs. $1.054B last year). $1B of share repurchases during Q - float is lower by 6% from last year. ROE of 15.9% is up more than 1K basis points from a year ago. Net investment income of $702M gains from $689M last year.
Net written premiums of $5.633B up 5% Y/Y. Underlying GAAP (strips out catastrophes) combined ratio of 91.2% vs. 90.7% a year ago.
Adjusted book value per share of $66.41 compares to $59.09 at the end of 2012.
Travelers Companies, Inc. is a holding company. It provides commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals in the United States.