Cambria Fund Profile: Shareholder Yield Suite

Episode Summary

Executive Summary: Meb Faber explains shareholder yield as a fuller way to assess what companies return to investors, combining dividends and buybacks rather than focusing on dividends alone. He argues buybacks have become a major share of capital returns, and Cambria’s systematic, valuation-aware ETF process seeks cheap, quality companies returning cash across U.S. and international markets.

Main Topics: Why dividends alone are incomplete (Priority: 5/5): The episode argues that dividend yield misses a large and increasingly important part of shareholder returns because buybacks now represent a major share of corporate payouts. Shareholder yield as a total-return framework (Priority: 5/5): Shareholder yield is defined as dividend yield plus buyback yield, offering a more holistic measure of cash returned to shareholders. Buybacks, valuation, and intrinsic value (Priority: 5/5): Faber emphasizes that buybacks help only when shares are repurchased below intrinsic value; overpriced repurchases can destroy value. Cambria’s rules-based investment process (Priority: 4/5): The funds use a systematic funnel: screen for shareholder yield, then valuation, quality, leverage, and momentum to avoid value traps. ETF suite across markets and market caps (Priority: 4/5): Cambria applies the strategy through multiple ETFs covering U.S., foreign developed, emerging markets, and now large- and small-cap U.S. segments. Historical performance and factor exposure (Priority: 4/5): Faber cites strong decade-long relative rankings for SYLD, FYLD, and EYLD, while acknowledging periods of underperformance are normal.

Key Arguments: Dividend yield understates what shareholders receive because buybacks have become a large and persistent component of corporate payouts. Total cash returned to shareholders has remained relatively steady over time; the mix shifted from dividends toward repurchases. Buybacks are economically beneficial only when shares are repurchased below intrinsic value, not when management overpays. A systematic process that combines shareholder yield with valuation, quality, leverage, and momentum can improve the odds of avoiding value traps. The strategy has demonstrated long-run competitiveness across U.S., developed foreign, and emerging markets, suggesting the effect is not region-specific. Investors should judge companies by total return and capital returned, not just by visible dividend yield.

Data Points: S&P 500 dividend yield: around 1% - Described as the lowest reading for U.S. stocks in history at the time of recording. Dividend payout share of earnings: around 40% - Current share of earnings paid out as cash dividends, down from roughly 60% a century ago. Dividend payout share a century ago: roughly 60% - Historical comparison showing dividends were once a much larger share of earnings distributions. SEC Rule 10B-18: 1982 - Safe-harbor rule that made share repurchases easier and helped accelerate buybacks. Buybacks vs dividends: Buybacks equaled or surpassed dividends by the late 1990s - Shows the structural shift in corporate payout mix. S&P 500 buybacks (12 months through Sep. 2025): over $1 trillion - Illustrates scale of share repurchases in large-cap U.S. equities. S&P 500 dividends (same period): about $660 billion - Used to compare buybacks with cash dividends. Cash returned to shareholders via buybacks: roughly 60 cents of every dollar returned - Indicates buybacks made up the majority of shareholder distributions. SYLD P/E vs Morningstar mid-cap value category: 13.7 vs 18.1 - As of end of August 2026, illustrating the fund’s value tilt. SYLD 1-year total return: 23.88% NAV; 24.07% market price - As of June 30, 2026, compared with the S&P 500. S&P 500 1-year return: 22.32% - Comparison benchmark for SYLD’s 1-year performance. SYLD 3-year return: 11.20% NAV; 11.19% market price - As of June 30, 2026. S&P 500 3-year return: 20.61% - Benchmark comparison for SYLD’s 3-year performance. SYLD 5-year return: 6.6% - As of June 30, 2026. S&P 500 5-year return: 13.41% - Benchmark comparison for SYLD’s 5-year performance. SYLD 10-year return: 13.26% NAV; 13.27% market price - As of June 30, 2026. S&P 500 10-year return: 15.51% - Benchmark comparison for SYLD’s 10-year performance. SYLD since inception: 12.12% NAV; 12.12% market price - Since May 14, 2013 through June 30, 2026. S&P 500 since inception comparison: 14.33% - Benchmark comparison since SYLD inception. SYLD ranking: 5th percentile of Morningstar mid-cap value category - 10-year trailing rank as of Aug. 31, 2026. FYLD ranking: 13th percentile of Morningstar foreign small/mid-value category - 10-year trailing rank as of Aug. 31, 2026. EYLD ranking: 3rd percentile of Morningstar diversified emerging markets category - 10-year trailing rank as of Aug. 31, 2026. SYLD underperformance streak: 2024 and 2025 - First back-to-back years trailing its category since inception in 2013. Gross/net expense ratio for SYLD: 0.59% - Disclosure information as of June 30, 2026.

Pivotal Quotes: "When companies with outstanding businesses and comfortable financial positions find their shares selling far below intrinsic value in the marketplace, no alternative action can benefit shareholders as surely as repurchases." — Warren Buffett: Used to support the argument that buybacks create value only when shares are cheap relative to intrinsic value. "The component most investors look to first is the dividend, and fair enough, reinvested dividends have historically made up roughly half of U.S. stocks' long-term returns." — Meb Faber: Introduces why dividends matter but also why they are incomplete as a sole measure of shareholder return. "The objective isn't simply to find companies returning a lot of cash, it's finding the ones doing that while also trading at reasonably, or downright cheap valuations, ideally with quality balance sheets so they can return cash sustainably." — Meb Faber: Summarizes the fund construction philosophy and the importance of valuation and balance-sheet quality.

Implications: For investors, the message is to look beyond dividends and assess total capital returned, especially buybacks. For asset managers, systematic strategies can exploit this broader income lens across markets, but performance will still vary cyclically.