GOLDMAN: Here Are The 15 Best Stocks For Fat Dividends And Huge Buybacks

S&P 500 companies will pay out $US1.1 trillion to investors in the form of stock buybacks and dividends in 2015. This is according to Goldman Sachs’ Amanda Sneider.

Buybacks will grow 18% next year after a 26% gain in 2014. S&P 500 companies are also expected to increase dividend payouts at a 7% annualized rate through 2017.

“Although we expect a gradual shift toward investing for growth via capital expenditures and M&A as confidence in the US economy grows, the popularity of dividends and buybacks should continue, particularly given the risks posed by struggling economies in Europe and Asia,” Sneider wrote.

We drew on Goldman’s “Total Cash Return to Shareholders” basket to highlight the stocks with the largest combined realised buyback and dividend yields. Total yield is calculated as the sum of gross buybacks and dividends as a share of market cap. These 15 stocks have a total yield greater than 14%. Note: they are not intended to serve as a well-diversified portfolio.

L-3 Communications Holdings: 14.2% total yield

Ticker: LLL

Sector: Industrials

Market Cap: $US10 billion

Buyback yield: 11.6%

Dividend yield: 2.7%

Description: L-3 is a provider of electronic and communication products in aerospace and national security.

Source: Goldman Sachs

Abbott Laboratories: 14.7% total yield

Ticker: ABT

Sector: Health Care

Market Cap: $US66 billion

Buyback yield: 12.6%

Dividend yield: 2.1%

Description: Abbott Laboratories is a North Chicago- based pharmaceuticals and health care products provider. It developed the first HIV screening test.

Source: Goldman Sachs

WellPoint Inc: 14.7% total yield

Ticker: WLP

Sector: Health Care

Market Cap: $US35 billion

Buyback yield: 12.8%

Dividend yield: 1.9%

Description: WellPoint is a medical insurance and health care services provider based in Indiana, Indianapolis.

Source: Goldman Sachs

Seagate Technology: 15.3% total yield

Ticker: STX

Sector: Information Technology

Market Cap: $US21 billion

Buyback yield: 11.9%

Dividend yield: 3.5%

Description: Seagate provides hard drives and other storage solutions for digital content and is based in Cupertino, California.

Source: Goldman Sachs

VeriSign Inc: 15.3 total yield

Ticker: VRSN

Sector: Information Technology

Market Cap: $US7 billion

Buyback yield: 15.3%

Dividend yield: 0.0%

Description: VeriSign is a Reston, Virgina-based network infrastructure provider and registry of various top-level domain names including .com and .net.

Source: Goldman Sachs

LyondellBasell Industries: 16.0% total yield

Ticker: LYB

Sector: Materials

Market Cap: $US13 billion

Buyback yield: 20.3%

Dividend yield: 1.9%

Description: LyondellBasell is a multinational chemical company based in Houston, Texas.

Source: Goldman Sachs

Illinois Tool Works: 16.7% total yield

Ticker: ITW

Sector: Industrials

Market Cap: $US36 billion

Buyback yield: 14.4%

Dividend yield: 2.3%

Description: Illinois Tool Works produces specialised industrial equipment and consumables. It is based in Glenview, Illinois.

Source: Goldman Sachs

Northrop Grumman: 17.3% total yield

Ticker: NOC

Sector: Industrials

Market Cap: $US29 billion

Buyback yield: 14.4%

Dividend yield: 2.9%

Description: Northrop Grumman is an American aerospace and defence technology company based in Virginia.

Source: Goldman Sachs

Cameron International: 17.4% total yield

Ticker: NOC

Sector: Industrials

Market Cap: $US12 billion

Buyback yield: 17.4%

Dividend yield: 0.0%

Description: Cameron International is headquartered in Houston, Texas, and provides flow equipment products and services to oil, gas, and process industries worldwide.

Source: Goldman Sachs

FedEx Corp: 17.6% total yield

Ticker: FDX

Sector: Industrials

Market Cap: $US48 billion

Buyback yield: 17.0%

Dividend yield: 0.6%

Description: FedEx is a global courier company headquartered in Little Rock, Arkansas.

Source: Goldman Sachs

Hess Corporation: 17.7 total yield

Ticker: HES

Sector: Energy

Market Cap: $US26 billion

Buyback yield: 16.3%

Dividend yield: 1.4%

Description: Hess Corporation is an American integrated oil company based in New York City.

Source: Goldman Sachs

Viacom Inc: 17.8% total yield

Ticker: VIAB

Sector: Consumer Discretionary

Market Cap: $US31 billion

Buyback yield: 16.1%

Dividend yield: 1.7%

Description: Viacom is an American media company with interests primarily in television, cable and cinema.

Source: Goldman Sachs

Corning Inc: 19.1% total yield

Ticker: GLW

Sector: Information Technology

Market Cap: $US26 billion

Buyback yield: 16.3%

Dividend yield: 2.8%

Description: Corning is an American manufacturer of glass and ceramics materials, based in Corning, New York.

Source: Goldman Sachs

CF Industries Holdings: 22.2% total yield

Ticker: CF

Sector: Materials

Market Cap: $US13 billion

Buyback yield: 20.3%

Dividend yield: 1.9%

Description: CF Industries manufactures agricultural fertilizers and is based in Deerfield, Illinois.

Source: Goldman Sachs

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