PDF Nasdaq US Shareholder Yield Index

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Nasdaq US Shareholder Yield Index

A Robust & Sustainable Yield Strategy

GAURAV PENDSE, SENIOR PRODUCT DEVELOPMENT ANALYST, NASDAQ GLOBAL INFORMATION SERVICES

With the recent concern of rising interest rates and the market correction in February, there is growing disarray amongst investors with regards to dividend paying stocks. Although interest rates can be a headwind for dividend paying stocks, there are opportunities within this space in which investors can potentially gain excess returns. Specifically, companies that not only pay sustainable dividends but also ones that offer stock buybacks and strong positive cash flow generation are important to consider in achieving a total return that exceeds benchmarks. The Nasdaq US Shareholder Yield Index (NQSHYL) does just that. The following are the factors that this index considers when selecting companies.

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FACTOR

1

Buyback Yield

2

Dividend Yield

3

Dividend Payout Per Share

4

Dividend Yield Historical Valuation (3-Year & 5-Year)

5

Dividend Growth (1-Year, 3-Year, 5-Year)

6

Free Cash Flow to Price

7

Free Cash Flow Growth 3-Year Sharpe Ratio

8

Free Cash Flow Growth (1-Year, 3-Year, & 5-Year)

9

EBITDA to Debt

For additional information on NQSHYL, pleae refer to the following link:



It is evident from the factors above that NQSHYL follows a robust methodology when selecting companies that exhibit high degrees of sustainable shareholder yield. While rising interest rates is a potential headwind for dividend yields, this index considers many other factors besides dividend yield which can offer investors a strong total yield.

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The information below compares the Nasdaq US Shareholder Yield Total Return Index (NQSHYLT) with 10 other dividend strategy indexes (all on a total return basis to show performance with dividends reinvested).

TOTAL RETURN INDEX TICKER

INDEX NAME

NQSHYLT

Nasdaq US Shareholder Yield Index

DVGTR

Nasdaq Dividend Achievers Select Index

TGPVAN

FTSE High Dividend Yield Index

SPHYDATR

S&P High Yield Dividend Aristocrats Index

MDYFT

Morningstar Dividend Yield Focus Index

DJDVY

Dow Jones US Select Dividend Index

DJUSDIVT

Dow Jones US Dividend 100 Index

VLFVDTR

Value Line Dividend Index

SPDAUDT

S&P 500 Dividend Aristocrats Index

MSDIVGT

Morningstar US Dividend Growth Index

SP5LVHDT

S&P 500 Low Volatility High Dividend Index

Nasdaq US Shareholder Yield Index (NQSHYLT) vs. Peers: 1-Year Performance

125

NQSHYLT

DVGTR 120

TGPVAN

115

SPHYDATR

MDYFT

110

DJDVY

DJUSDIVT

105

VLFVDTR

SPDAUDT 100

MSDIVGT

95

SP5LVHDT

3/17/2017 4/12/2017

5/8/2017 6/3/2017 6/29/2017 7/25/2017 8/20/2017 9/15/2017 10/11/2017 11/6/2017 12/2/2017 12/28/2017 1/23/2018 2/18/2018 3/16/2018

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Nasdaq US Shareholder Yield Index (NQSHYLT) vs. Peers: Year-to-Date Performance

110

NQSHYLT

DVGTR

105

TGPVAN

SPHYDATR

MDYFT

100

DJDVY

DJUSDIVT

VLFVDTR

95

SPDAUDT

MSDIVGT

90

SP5LVHDT

12/29/2017 1/5/2018

1/12/2018 1/19/2018 1/26/2018

2/2/2018 2/9/2018 2/16/2018 2/23/2018 3/2/2018 3/9/2018 3/16/2018

INDEX TICKER NQSHYLT DVGTR MSDIVGT SPDAUDT TGPVAN SPHYDATR DJDVY DJUSDIVT VLFVDTR MDYFT SP5LVHDT

2018 YTD 2.37% 2.00% 1.74% 0.58% 0.35% -0.66% -0.85% -0.90% -1.05% -2.93% -4.46%

1 YEAR 17.19% 16.04% 17.01% 15.49% 12.09% 10.34% 9.52% 15.46% 6.92% 6.14% 2.34%

As the charts and the table above show, on a year-to-date and 1-year basis, NQSHYLT has outperformed every one of the other peer indexes outlined. This illustrates the robustness and uniqueness of the Nasdaq US Shareholder Yield Index and the various factors that it utilizes in selecting companies that provide strong, sustainable shareholder yield.

Nasdaq? is a registered trademark of Nasdaq, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

? Copyright 2018. All rights reserved. Nasdaq, Inc. 1845-Q18

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