Free Cash Flow and Shareholder Yield

william w. priest, cfa, cpa, has forty years of experience in the investment management industry, almost all of it as an investment analyst and portfolio manager. Before forming Epoch Investment Partners with three associates in 2004, he spent most of his career at Credit Suisse Asset Management-Americas, and its predecessor firm, BEA Associates, where he was a cofounder in the early 1970’s. Priest served as chairman, CEO, and portfolio manager of CSAM-Americas, and CEO and portfolio manager of BEA. He is a CFA, a CPA, and a graduate of both Duke University and the University of Pennsylvania Wharton Graduate School of Business. Priest is the author of several published articles on investing and finance including the book, The Financial Reality of Pension Funding Under ERISA. lindsay hatton mcclelland was an investment banking analyst in Merrill Lynch’s Retail and Consumer Products Group and an associate vice president at Financial Dynamics, where she specialized in corporate communications and investor relations. She is a graduate of Williams College and received her MFA from New York University’s Graduate School of the Arts and Sciences.

• Foreword ixPreface xiiiAcknowledgments xvPart One Defining Free Cash Flow and Shareholder YieldChapter 1 Free Cash Flow 3Chapter 2 The Sources of Equity Return 23Chapter 3 Shareholder Yield in Depth 39Chapter 4 Focus on Dividends 59Part Two The New Investment LandscapeChapter 5 Globalization 67Chapter 6 Interest Rates, Bubbles, and Punctuated Equilibriums 95Part Three Strategies for the New Investment LandscapeChapter 7 Investing in Today’s Capital Markets 133Appendix Continuous-Time Free Cash Flow Valuation Framework 143Notes 157References 163Index 165