GOLDMAN: These Are The 23 Best Stocks For Fat Dividends And Big Buyback Plans

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In a recent Portfolio Manager Action Alert note, Goldman Sachs’ Robert Boroujerdi makes his case for income stocks.He calls his specific strategy the “social contract” i.e. companies that should offer returns of at least 5 per cent in 2013 through dividends and accretive buybacks.

Boroujerdi like these stocks because companies have the capacity to pay, investors demand them, and they look more attractive than bonds.

Goldman identified 23 buy-rated stocks from various sectors.

NOTE: Earnings per share accretion occurs because buybacks lower share counts and therefore boost EPS. All EPS accretion due to share share count change represents a 2013 estimate.

Assurant Inc.

Ticker: AIZ

Price Target
$45.00

Dividend Yield
2.6 per cent

EPS Accretion Due To Share Count Change
13.8 per cent

Accretion + Yield
16.4 per cent

Description: Assurant is an insurance company.

Source: Goldman Sachs

Domtar Corp.

Ticker: UFS

Price Target
$89.00

Dividend Yield
2.1 per cent

EPS Accretion Due To Share Count Change
13.5 per cent

Accretion + Yield
15.6 per cent

Description: Domtar Corp provides paper, packaging, and environmental services.

Source: Goldman Sachs

Validus Holdings

Ticker: VR

Price Target
$44.00

Dividend Yield
3.3 per cent

EPS Accretion Due To Share Count Change
10.6 per cent

Accretion + Yield
13.9 per cent

Description: Validus is an insurance company. It bought reinsurance competitor Flagstone Re last year for $623 million.

Source: Goldman Sachs

Coca-Cola Enterprises

Ticker: CCE

Price Target
$39.00

Dividend Yield
2.6 per cent

EPS Accretion Due To Share Count Change
11.1 per cent

Accretion + Yield
13.7 per cent

Description: Coca-Cola is a marketer, producer, and distributor of Coca-Cola products including Diet Coke, Sprite, Fanta, Ocean Spray, Monster etc.

Source: Goldman Sachs

Wyndham Worldwide Corp.

Ticker: WYN

Price Target
$62.50

Dividend Yield
2.0 per cent

EPS Accretion Due To Share Count Change
9.8 per cent

Accretion + Yield
11.8 per cent

Description: Wyndham Worldwide is the holding company for leisure, lodging, and gaming companies like Wyndham Hotels & Resorts, Group RCI etc.

Source: Goldman Sachs

HollyFrontier Corporation

Ticker: HFC

Price Target
$69.00

Dividend Yield
8.4 per cent

EPS Accretion Due To Share Count Change
3.5 per cent

Accretion + Yield
11.9 per cent

Description: HollyFrontier Corp is a refiner and distributor of petroleum and petroleum products. It is a Fortune 500 company headquartered in Dallas, Texas.

Source: Goldman Sachs

Lowe's Companies

Ticker: LOW

Price Target
$38.50

Dividend Yield
2.2 per cent

EPS Accretion Due To Share Count Change
8.0 per cent

Accretion + Yield
10.2 per cent

Description: Lowe's is a retail home improvement company.

Source: Goldman Sachs

Ameriprise Financial

Ticker: AMP

Price Target
$64

Dividend Yield
2.9 per cent

EPS Accretion Due To Share Count Change
5.6 per cent

Accretion + Yield
8.5 per cent

Description: Ameriprise is a financial planning company that is headquartered in Minneapolis, Minnesota.

Source: Goldman Sachs

Marathon Petroleum Corp.

Ticker: MPC

Price Target
$87.00

Dividend Yield
2.7 per cent

EPS Accretion Due To Share Count Change
5.9 per cent

Accretion + Yield
8.6 per cent

Description: Marathon is an oil company. It just purchased a refinery from BP.

Source: Goldman Sachs

Norfolk Southern Corp.

Ticker: NSC

Price Target
$67.00

Dividend Yield
3.3 per cent

EPS Accretion Due To Share Count Change
5.2 per cent

Accretion + Yield
8.4 per cent

Description: Norfolk makes rail cars. It remains poised to benefit from natural gas drilling.

Source: Goldman Sachs

AXIS Capital Holdings Limited

Ticker: AXS

Price Target
$43.00

Dividend Yield
2.8 per cent

EPS Accretion Due To Share Count Change
5.4 per cent

Accretion + Yield
8.2 per cent

Description: Bermuda based AXIS Capital Holdings Limited is a holding company and provides non-life insurance globally.

Source: Goldman Sachs

Fifth Third Bancorp

Ticker: FITB

Price Target
$17.50

Dividend Yield
2.9 per cent

EPS Accretion Due To Share Count Change
5.2 per cent

Accretion + Yield
8.2 per cent

Description: FIfth Third Bancorp is an Ohio based bank holding company.

Source: Goldman Sachs

Applied Materials Inc.

Ticker: AMAT

Price Target
$13.00

Dividend Yield
3.1 per cent

EPS Accretion Due To Share Count Change
4.7 per cent

Accretion + Yield
7.8 per cent

Description: Applied Materials is a semiconductor maker that is headquartered in Santa Clara, California.

Source: Goldman Sachs

Pfizer

Ticker: PFE

Price Target
$30.00

Dividend Yield
3.7 per cent

EPS Accretion Due To Share Count Change
3.9 per cent

Accretion + Yield
7.7 per cent

Description: American multinational pharmaceutical company Pfizer is headquartered in New York City.

Source: Goldman Sachs

JP Morgan

Ticker: JPM

Price Target
$52.00

Dividend Yield
3.1 per cent

EPS Accretion Due To Share Count Change
4.5 per cent

Accretion + Yield
7.6 per cent

Description: JPMorgan is an investment bank.

Source: Goldman Sachs

Dell

Ticker: DELL

Price Target
$13.00

Dividend Yield
3.0 per cent

EPS Accretion Due To Share Count Change
4.5 per cent

Accretion + Yield
7.5 per cent

Description: Dell is an American multinational computer technology company headquartered in Texas.

Source: Goldman Sachs

Republic Services

Ticker: RSG

Price Target
$37.00

Dividend Yield
3.2 per cent

EPS Accretion Due To Share Count Change
3.1 per cent

Accretion + Yield
6.4 per cent

Description: Republic is a waste management company.

Source: Goldman Sachs

Prudential Financial Inc.

Ticker: PRU

Price Target
$73.00

Dividend Yield
3.3 per cent

EPS Accretion Due To Share Count Change
2.9 per cent

Accretion + Yield
6.1 per cent

Description: Prudential Financial provides life insurance and is headquartered in Newark, New Jersey.

Source: Goldman Sachs

BlackRock

Ticker: BLK

Price Target
$220.00

Dividend Yield
3.2 per cent

EPS Accretion Due To Share Count Change
2.7 per cent

Accretion + Yield
5.9 per cent

Description: BlackRock is a fund manager headquartered in New York City.

Source: Goldman Sachs

CSX Corp.

Ticker: CSX

Price Target
$23.00

Dividend Yield
2.8 per cent

EPS Accretion Due To Share Count Change
2.9 per cent

Accretion + Yield
5.7 per cent

Description: CSX is a rail car manufacturer and is headquartered in Jacksonville, Florida.

Source: Goldman Sachs

Corning Inc.

Ticker: GLW

Price Target
$14.50

Dividend Yield
2.8 per cent

EPS Accretion Due To Share Count Change
2.7 per cent

Accretion + Yield
5.5 per cent

Description: Corning makes specialty glass and ceramic products and is headquartered in Corning, New York.

Source: Goldman Sachs

The travellers Companies Inc.

Ticker: TRV

Price Target
$83.00

Dividend Yield
2.6 per cent

EPS Accretion Due To Share Count Change
2.9 per cent

Accretion + Yield
5.5 per cent

Description: The travellers Companies Inc. is an insurance company headquartered in New York City.

Source: Goldman Sachs

Comcast Corp.

Ticker: CMCSA

Price Target
$42.00

Dividend Yield
2.2 per cent

EPS Accretion Due To Share Count Change
3.2 per cent

Accretion + Yield
5.4 per cent

Description: Comcast provides entertainment products and communications services and is headquartered in Philadelphia, Pennsylvania.

Source: Goldman Sachs

But before you do anything check out David Rosenberg's investment outlook for 2013...

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