Since TD Epoch’s founding, we have defined ourselves as investors who focus on free cash flow rather than on earnings. The quickest way to summarize our philosophy would be to say that it is the ability to generate free cash flow that makes a company worth something to begin with, and it is how management allocates that free cash flow that determines whether the value of the business rises or falls.

In this paper, we turn our attention to the first half of our statement, and ask two questions: 1) Why does free cash flow matter more than earnings in determining the value of a business, and 2) do free-cash-flow metrics help investors identify stocks that outperform the market?

Read Free Cash Flow Works

Epoch Investment Partners (TD Epoch) Epoch

Epoch Investment Partners (TD Epoch) manages a variety of investment strategies with different investment objectives, but they share a common philosophy centered on the belief that the generation and allocation of free cash flow represents the best predictor of shareholder return.

Information provided is general information and is for educational purposes only, and does not include, or constitute as, financial product advice.