The process of share repurchases is a special way to give shareholder’s money back in a very tax-optimized way.
A low yielding stock with a 2 percent yield can lift the total yield via stock repurchases to 4 percent or so. For sure, share buybacks are no cash yields on your trading account; it’s an indirect way to reduce the current shares and lift the potential share price.
There is an index outside that covers some of the best stocks with share repurchases that bought at least 5 percent of its outstanding shares within the past 12 months.
Today I would like to screen the Buyback Achievers index by the best yielding stocks with a low forward P/E as well as a very low debt-to-equity ratio. Low debt is a good indicator for potential growth or additional share buybacks.
These are my criteria in detail:
- Positive Dividend Yield
- Forward P/E under 15
- Long-Term Debt-To-Equity below 0.2
- Member of the Buyback Achievers Index
In total, sixteen Buyback Achievers Index stocks fulfilled the above mentioned restrictions of which ten have a current buy or better rating.