Free Cash Flow Yield Research Papers

Five curated academic and institutional papers on free cash flow yield investing, covering dividend analysis, quality dimensions, value stock methodology, and return predictability.

1. Incorporating Free Cash Flow Yield in Dividend Analysis — Qing Li & Aye Soe, CFA (S&P Global, 2017). Combines dividend yield and FCF yield to construct a portfolio with improved risk-adjusted returns versus either metric alone.
2. Exploring the Quality Dimensions of Free Cash Flow Yield — Danke Wang, CFA, FRM (Pacer ETFs, 2023). Shows that high FCF yield companies exhibit stronger ROE, lower leverage, and better earnings quality — making FCF yield a quality signal as much as a value signal.
3. Value Stocks: Why Focus on Free Cash Flow? — Hardy, Wiggins & Coffin (Lord Abbett, 2024). Argues that free cash flow is a superior valuation metric as intangible assets now exceed 80% of S&P 500 assets, rendering book value less meaningful.
4. Cash Flow Growth and Stock Returns — Benjamin A. Jansen (Ivey Business School, 2021). Tests a model expressing expected returns as a function of expected free cash flow growth; finds cash flow growth contains information beyond profits and dividends.
5. On the Risk Return Characteristics of Those Firms Experiencing The Highest Free Cash Flow Yields — Payne, Wong & Payne (2016). Uses multiple discriminant analysis to identify financial characteristics of high FCF yield firms; finds earnings variability is the most significant distinguishing factor.