Global economic conditions are a story in contrast. In the U.S., the real economy and the financial economy are diverging; in Europe, some countries appear on the path to growth while others are stagnant or deteriorating; and in Japan, policy implementation has been designed to bring an end to years of deflationary malaise.
In this one on one interview with Bill Priest on Money Talk, Bill speaks to Kim Parlee about his outlook on capital markets, shareholder yield and the 9% solution.
The Federal Reserve has signaled the end of quantitative easing in the U.S., conceptually if not tactically. Bill Priest discusses the global implications of a higher discount rate on various financial assets in our new white paper. Learn More >
We are global equity investors with a distinct perspective on the long-term drivers of shareholder return.
Advantage from Perspective
Long-term investment success demands a focus on essential truths that are not always obvious. We focus on investing in companies with the enduring elements that create value: free cash flow and managements committed to providing positive returns to shareholders. Like the companies in which we invest, we are committed to transparency. This includes sharing our global market perspectives and insights that help drive our investment decisions.
Investors often view a company through the prism of accounting measures such as price-to-book value and price-to-earnings ratios. Epoch adopts a different approach. Earnings growth and dividends drive shareholder returns, and they come from a single source: cash flow. We focus on companies that are growing free cash flow and allocating it intelligently.
Reinvesting cash flows in internal projects or acquisitions is preferred when those actions will generate returns above the cost of capital. Otherwise, we believe company managements should return excess cash to shareholders through dividends, share buybacks or debt repayments -- collectively known as "shareholder yield."
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