A few years ago, WisdomTree coined the phrase “Forgotten Dividend Payers” to refer to mid-cap and small-cap companies that pay dividends. In a yield-starved environment, within the United States one could dip down the market capitalization-size spectrum to find higher dividend yields.
The Share Buyback Phenomenon
Share buybacks have generated a lot of attention within the low-yield environment that we’ve seen since the global financial crisis of 2008–2009. For example, in 2017, we saw Apple commit to a program to return $300 billion to shareholders by March 2019. $210 billion of this would be in the form of a share buyback.1 The reality for U.S. large-cap firms—especially U.S. large-cap technology firms—is that they choose to utilize share buybacks as an important means of returning cash to shareholders.
But what about small caps?
Long-Term Record Indicates Small Caps with Net Buybacks Have Been Strong
(6/30/1963–6/30/2017)