Capital Markets: Observations and Insights Autumn 2019

Searching for Yield ​ Lending vs. Owning

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

Total Equity “Yield”

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

Repurchases Dividend

4%

5.4%

2%

1.9%

0%

-2%

-4%

-6%

3.5%

-8%

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

S&P 500

Source: FactSet and Alger through August 2019.

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