Tag Archives: free cash flow

The Importance of Sector Diversification in a Yield-Focused Strategy – Part II

In our previous blog (The Importance of Sector Diversification in a Yield-Focused Strategy – Part I), we highlighted that sector biases in an unconstrained yield strategy could detract from portfolio returns. In this blog, we will show that addressing the sector concentration issue can improve risk-adjusted returns. We constructed three sector-diversified portfolios—the dividend yield portfolio, Read more […]

The Importance of Sector Diversification in a Yield-Focused Strategy – Part I

Diversification is undoubtedly a central tenet of investing. Many studies[1] [2] [3] have shown that over the long-term investment horizon, maintaining a diversified portfolio can potentially reduce overall risk without compromising expected returns. As such, most market participants strive to form diversified portfolios in order to achieve their desired investment outcomes. There are many ways Read more […]

Using Free Cash Flow Yield to Find Sustainable Dividends

When a company makes profit, it may choose to reinvest all of its earnings (common for growing stage companies) or pay back some to its shareholders in the form of dividends (for more mature companies). For market participants who seek a steady income stream and potential dividend reinvestment opportunities, dividend strategies can be one potential Read more […]