Capital Markets: Observations & Insights

IV

Searching for Yield Lending vs. Owning

• Stocks’ total “yield,” which accounts for all of the cash that companies “return” to investors and comprises dividends plus share repurchases, is attractive relative to bonds and particularly compelling relative to history

I

II

Total Equity “Yield”

S&P 500 Total “Yield” Less BAA Bond Yield

2%

5.1%

Total

III

0%

1.8%

Dividends

-2%

IV

-4%

Repurchases

-6%

3.4%

V

-8%

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

S&P 500

VI

Source: FactSet and Alger as of December 2019. Bloomberg Barclays U.S. Aggregate Bond.

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