GOLDMAN: The best 14 stocks for fat dividends and huge buybacks

The stock market is on track to hit Goldman’s target by the end of 2015, according to David Kostin.

And so with Goldman seeing stock prices get near their target, the firm has a basket of stocks that return cash through buybacks and dividends.

We’ve highlighted the stocks in Goldman’s “Total Cash Return to Shareholders” basket, which provides investors more than a 14% total yield on a trailing 12-month basis.

“The current constituents of the 50-stock equal-weighted sector-neutral basket have a median combined shareholder yield of 12% compared with 5% for the median S&P 500 company,” Kostin wrote.

Total yield is calculated as the sum of gross buybacks and dividends as a share of market cap.

Note: they are not intended to serve as a well-diversified portfolio.

L-3 Communications: 14.2% total yield

Ticker: LLL

Sector: Industrials

Market Cap: $US11 billion

Buyback yield: 11.6%

Dividend yield: 2.7%

Description: L-3 creates electronic and communications products for use in aerospace and national security.

Anthem: 14.7% total yield

Ticker: ANTM

Sector: Industrials

Market Cap: $US39 billion

Buyback yield: 12.8%

Dividend yield: 1.9%

Description: Formerly known as Wellpoint, Anthem is a medical insurance and health care services provider.

Source: Goldman Sachs

Seagate Technology: 15.3% total yield

Ticker: STX

Sector: Technology

Market Cap: $US209 billion

Buyback yield: 11.9%

Dividend yield: 3.5%

Description: Seagate creates data storage solutions including hard drives and cloud backups.

Source: Goldman Sachs

VeriSign: 15.3% total yield

Ticker: VRSN

Sector: Communications

Market Cap: $US8 billion

Buyback yield: 15.3%

Dividend yield: 0.0%

Description: VeriSign is based in Reston, Virginia, and provides network infrastructure 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: $US46 billion

Buyback yield: 12.5%

Dividend yield: 3.5%

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

Source: Goldman Sachs

Illinois Tool Works: 16.7% total yield

Ticker: ITW

Sector: Industrials

Market Cap: $US38 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: $US34 billion

Buyback yield: 14.4%

Dividend yield: 2.9%

Description: Northrop Grumman is a Virginia-based aerospace and defence technology company that specialises in unmanned systems.

Source: Goldman Sachs

Hess: 17.7% total yield

Ticker: HES

Sector: Industrials

Market Cap: $US23 billion

Buyback yield: 16.3%

Dividend yield: 1.4%

Description: Hess produces and transports crude oil and natural gas.

Source: Goldman Sachs

Viacom: 17.8% total yield

Ticker: VIAB

Sector: Communications

Market Cap: $US28 billion

Buyback yield: 16.1%

Dividend yield: 1.7%

Description: Viacom's media networks reach over 700 million global subscribers and include MTV, BET and Nickelodeon.

Source: Goldman Sachs

Corning: 19.1% total yield

Ticker: GLW

Sector: Technology

Market Cap: $US32 billion

Buyback yield: 16.3%

Dividend yield: 2.8%

Description: Corning is an American manufacturer of glass and ceramic materials.

Source: Goldman Sachs

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