GOLDMAN: Here are the 23 best stocks for fat dividends and huge buybacks

The Goldman Sachs research team has released its report on dividend and buyback investment strategies.

“S&P 500 companies are buying back more than 3% of market cap, 2x the pace from the 1990s, and dividends are up 50% since 2010,” writes Goldman economist Stuart Kaiser. “80% of S&P 500 is buying back stock. We expect 10% buyback and dividend growth in 2014.”

Strong corporate balance sheets, low bond yields, and low U.S. economic growth has meant that investors want companies to return more cash to shareholders via buybacks and dividends, Kaiser notes.

And over the last 20 years, S&P 500 companies with robust buyback programs have outperformed the market.

Kaiser picks out 23 top S&P 500 stocks organised by total yield.

Assurant Inc.

Ticker: AIZ

Sector: Financials

Market Cap ($B): $US4.1

Buyback yield: 11.5%

Dividend yield: 2.4%

Total yield: 13.9%

Description: Assurant is an insurance company based in New York.

Source: Goldman Sachs

L-3 Communications

Ticker: LLL

Sector: Industrials

Market Cap ($B): $US8.3

Buyback yield: 11.2%

Dividend yield: 2.7%

Total yield: 13.9%

Description: Shares of L3 are up almost 20% year to date.

Source: Goldman Sachs

Northrop Grumman

Ticker: NOC

Sector: Industrials

Market Cap ($B): $US21.4

Buyback yield: 10.6%

Dividend yield: 3.4%

Total yield: 13.9%

Description: Shares of the aerospace company are up 40% year to date.

Source: Goldman Sachs

NVIDIA Corp.

Ticker: NVDA

Sector: Information Technology

Market Cap ($B): $US8.9

Buyback yield: 12.4%

Dividend yield: 1.6%

Total yield: 14.0%

Description: NVIDIA, which develops graphic chips, has seen share price jump 22% year to date.

Source: Goldman Sachs

Western Digital

Ticker: WDC

Sector: Information Technology

Market Cap ($B): $US15.2

Buyback yield: 11.8%

Dividend yield: 2.5%

Total yield: 14.4%

Description: Shares of the data storage company are up almost 50% year to date.

Source: Goldman Sachs

Sallie Mae

Ticker: SLM

Sector: Financials

Market Cap ($B): $US10.7

Buyback yield: 10.9%

Dividend yield: 3.5%

Total yield: 14.4%

Description: SLM recently announced it would keep its dividend steady at $0.15 per share.

Source: Goldman Sachs

Coca-Cola Enterprises

Ticker: CCE

Sector: Consumer Staples

Market Cap ($B): $US10.8

Buyback yield: 12.4%

Dividend yield: 2.4%

Total yield: 14.8%

Description: Shares of CCE are up over 20% year to date.

Source: Goldman Sachs

Computer Sciences Corp.

Ticker: CSC

Sector: Information Technology

Market Cap ($B): $US7.6

Buyback yield: 11.6%

Dividend yield: 3.2%

Total yield: 14.8%

Description: CNBC's Jim Cramer called this stock a buy recently, saying he was excited by the potential growth of cyber security.

Source: Goldman Sachs

People's United Financial

Ticker: PBCT

Sector: Financials

Market Cap ($B): $US4.7

Buyback yield: 9.9%

Dividend yield: 5.1%

Total yield: 15.0%

Description: Shares of People's United saw a 1% drop in 2012, but are up 15% year to date.

Source: Goldman Sachs

Marathon Petroleum

Ticker: MPC

Sector: Energy

Market Cap ($B): $US20.4

Buyback yield: 12.2%

Dividend yield: 3.0%

Total yield: 15.2%

Description: Marathon operates seven U.S. refineries that can pump out 1.7 million barrels a day.

Source: Goldman Sachs

L Brands Inc.

Ticker: LTD

Sector: Consumer Discretionary

Market Cap ($B): $US17.9

Buyback yield: 1.2%

Dividend yield: 14.4%

Total yield: 15.5%

Description: L Brands operates Victoria's Secret and Bath & Body Works.

Source: Goldman Sachs

Reynolds American

Ticker: RAI

Sector: Consumer Staples

Market Cap ($B): $US26.9

Buyback yield: 6.9%

Dividend yield: 8.8%

Total yield: 15.7%

Description: According to Citi, e-cigarettes will grow between 40% and 50% next year and become a $US3 billion industry by the end of 2015.

Source: Goldman Sachs

Wynn Resorts

Ticker: WYNN

Sector: Consumer Discretionary

Market Cap ($B): $US16.2

Buyback yield: 0.2%

Dividend yield: 15.7%

Total yield: 15.9%

Description: Shares of the resort chain are up nearly 35% year to date.

Source: Goldman Sachs

Yahoo!

Mayer in 2005

Ticker: YHOO

Sector: Information Technology

Market Cap ($B): $US34.6

Buyback yield: 15.9%

Dividend yield: 0.0%

Total yield: 15.9%

Description: Yahoo! stock has had a big 2013, up 70% year to date.

Source: Goldman Sachs

Gamestop

Ticker: GME

Sector: Consumer Discretionary

Market Cap ($B): $US5.8

Buyback yield: 11.1%

Dividend yield: 5.3%

Total yield: 16.5%

Description: Shares of Gamestop, the video game chain, are up 93% year to date.

Source: Goldman Sachs

Ameriprise Financial

CBS makes almost $US500 million on DVR viewership.

Ticker: AMP

Sector: Financials

Market Cap ($B): $US18.1

Buyback yield: 14.3%

Dividend yield: 3.2%

Total yield: 17.5%

Description: 'Ameriprise has been meaningfully deploying capital to boost investors' confidence,' Zacks wrote last month.

Source: Goldman Sachs

Tenet Healthcare

Ticker: THC

Sector: Health Care

Market Cap ($B): $US4.7

Buyback yield: 18.1%

Dividend yield: 0.1%

Total yield: 18.2%

Description: Shares of Tenet are up nearly 40% year to date.

Source: Goldman Sachs

Pfizer

Ticker: PFE

Sector: Health Care

Market Cap ($B): $US190.5

Buyback yield: 14.4%

Dividend yield: 3.9%

Total yield: 18.2%

Description: The biopharmaceutical recently received FDA approval for Duavee, a new hormone pill to treat hot flashes and osteoporosis associated with menopause.

Source: Goldman Sachs

The Dun & Bradstreet

Ticker: DNB

Sector: Industrials

Market Cap ($B): $US4.0

Buyback yield: 17.2%

Dividend yield: 1.9%

Total yield: 19.2%

Description: Shares are up 30% year to date.

Source: Goldman Sachs

Pentair Ltd.

Ticker: PNR

Sector: Industrials

Market Cap ($B): $US13.1

Buyback yield: 22.1%

Dividend yield: 4.3%

Total yield: 26.4%

Description: Pentair shares are up nearly 30% in 2013.

Source: Goldman Sachs

AIG

Ticker: AIG

Sector: Financials

Market Cap ($B): $US72.1

Buyback yield: 39.0%

Dividend yield: 0.0%

Total yield: 39.0%

Description: Shares of the insurance giant are up 33% year to date.

Source: Goldman Sachs

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