An updated edition of the May 8, 2025, article.

In a market increasingly driven by narratives and speculative growth, many investors overlook a powerful metric, shareholder yield, which quietly compounds wealth over time. Defined as the combination of dividend yield, share buybacks, and net debt reduction, shareholder yield reflects how effectively a company returns capital to its shareholders. For long-term investors seeking sustainable returns and downside protection, focusing on high shareholder yield stocks offers a compelling strategy.

First, dividends provide a steady income stream and often signal management’s confidence in a company’s financial health. Historically, dividends have contributed a substantial portion of total equity returns, especially during sideways or bear markets. But shareholder yield goes a step further by incorporating buybacks, which reduce share count and boost per-share metrics, such as earnings and cash flow. This is particularly attractive in a low-growth environment, where internal efficiencies and capital allocation matter more than rapid top-line expansion.

The third leg, debt reduction, adds an often-overlooked layer of risk management. Companies using excess cash to deleverage improve balance sheet strength, reducing default risk and enhancing resilience during economic downturns. Investors exposed to such companies benefit not only from capital returned but also from improved financial positioning, which supports valuations and protects downside. By focusing on firms like RITHM CAP CP (RITM Quick QuoteRITM - Free Report) , Cognizant Technology Solutions (CTSH Quick QuoteCTSH - Free Report) , Lam Research (LRCX Quick QuoteLRCX - Free Report) and McKesson (MCK Quick QuoteMCK - Free Report) , which boast high shareholder yield, investors can identify opportunities that not only provide income but also enhance overall portfolio returns.

Moreover, companies with consistently high shareholder yield tend to exhibit disciplined capital allocation and management alignment with investor interests. These firms are less likely to chase expensive acquisitions or engage in value-destructive expansion. Empirical studies, including those by academic and quantitative strategists, have shown that portfolios focused on shareholder yield outperform broad market indices over the long term, often with lower volatility.

From an investor’s perspective, this approach offers both income and growth, making it ideal for a variety of goals, whether compounding wealth, funding retirement, or managing risk. In times of uncertainty, high shareholder yield serves as a cushion; in bull markets, it compounds returns.

As market valuations stretch and economic cycles shift, focusing on shareholder-friendly companies may prove to be not just a smart defensive strategy, but a potent wealth-building one. Investors would do well to look beyond headlines and favor those businesses that consistently reward their shareholders in tangible, trackable ways.

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4 Top Stocks With Impressive Shareholder Yield

RITHM CAP CP stands out as a strong candidate for high shareholder yield due to its attractive dividend payments, consistent share buybacks and effective debt management. The company offers a competitive dividend yield of around 8.92%.

RITM has increased its dividend payout four times in the past five years, reflecting an annualized dividend growth rate of 18.7%. The payout ratio of 47% indicates that the company is paying less than its income, which is sustainable over the long term. This also reflects that RITM is keeping funds for better investment opportunities. The company is likely to pay its next dividend of 25 cents per share in July.

Additionally, RITM has been reducing its debt levels and strengthening its financial position. It reduced its long-term debt from $27.19 billion in 2020 to $18.6 billion in December 2024. Compared to other investment management firms, RITM’s shareholder yield remains impressive, making it a compelling choice for investors seeking a combination of income and capital appreciation while benefiting from disciplined capital allocation.

RITM currently sports a Zacks Rank #1 (Strong Buy) and a Zacks Value Score of ‘B’, implying strong upside potential for the stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cognizant provides digital services and solutions, consulting, application development, systems integration, application testing, application maintenance, infrastructure services and business process services. With a dividend yield of 1.64%, CTSH provides investors with a steady income stream. The company has increased its dividend payout five times in the past five years, reflecting an annualized dividend growth rate of 7.94%. The payout ratio of 26% indicates that the company is paying less than its income, which is sustainable over the long term. This also reflects that Cognizant is keeping funds for better investment opportunities.

Cognizant also focuses on reducing its leverage, which ensures long-term financial stability. CTSH reduced its long-term debt from $663 million in 2020 to $567 million in 2024. The company has repurchased shares worth $605 million and $1.06 billion in 2024 and 2023, respectively.

Cognizant currently has a Zacks Rank #2 (Buy) and a Zacks Value Score of ‘B’, implying solid prospects for the stock.

Lam Research has a dividend yieldof approximately 1%, providing another option for income-seeking investors. The company has raised its dividend payout six times in the past five years, reflecting an annualized dividend growth rate of 15.4%. The payout ratio of 25% indicates that Lam Research is paying less than its income, which is sustainable over the long term. This also reflects that the company is keeping funds for better investment opportunities.

LRCX has also been actively enhancing its operations to improve profitability and reduce debt. With a long history of rewarding shareholders, Lam Research’s strong capital allocation strategy makes it a standout option for those looking for sustainable income and growth potential. LRCX reduced its long-term debt from $4.97 billion in 2020 to $3.73 billion in 2024. In the first nine months of fiscal 2025, the company has repurchased stocks worth $2 billion. The company had repurchased common stock worth $3.7 billion in fiscal 2024.

LRCX currently carries a Zacks Rank of 2 and a Zacks Value Score of ‘C’, implying solid prospects for the stock.

McKesson, a health care services and information technology company, boasts an impressive shareholder yield due to its robust dividend policy and stock repurchase initiatives. The company offers a dividend yield of around 0.39%. MCK has increased its dividend payout five times in the past five years, reflecting an annualized dividend growth rate of 13.5%. The payout ratio of 9% indicates that the company is paying less than its income, which is sustainable over the long term. This also reflects that MCK is keeping funds for better investment opportunities.

Additionally, it maintains a solid balance sheet with manageable debt levels, ensuring financial stability. The firm reduced its long-term debt from $14.47 billion in 2021 to $10.06 billion in December 2024. MCK’s commitment to shareholder-friendly policies makes it a better choice for investors seeking strong total returns through dividends and capital appreciation. McKesson returned $3.5 billion of cash to shareholders during fiscal 2025 through $3.1 billion of common stock repurchases and $345 million of dividend payments. The total remaining authorization for repurchase of the company’s common stock, as of March 31, 2025, was $7.5 billion.

MCK currently carries a Zacks Rank #2 and a Zacks Value Score of ‘A’, implying solid prospects for the stock.