An improving economic backdrop, higher sales and earnings, and less of a need for companies to hoard cash could bring a surge in dividends and buybacks this year. Goldman Sachs analysts see S&P 500 dividends rising by 5% and buybacks climbing 15% in 2021.
The S&P 500 yields about 1.5% annually, and has an overall dividend payout ratio of about 50% of free cash flow. “With our strong capital liquidity position, we expect to continue share repurchases of at least $50 million per quarter to offset share-based compensation dilution in fiscal 2021, and we will certainly consider doing more buybacks during the year as well as appropriate,” said Raymond James CFO Paul Shoukry on the company’s fiscal fourth-quarter earnings call in late October.
Tyson Foods has the highest dividend yield of the consumer-focused group, at 2.5%, while Best Buy has the cheapest valuation, with a free cash flow yield of 18.5%. Lowe’s has been the most aggressive in its shareholder returns: It bought back more than $3 billion of its stock in 2019 and has a dividend payout that amounts to 65.6% of its free cash flow.
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I'm moving 90 % ofmy entire portfolio into Divi stocks. I like this list thanks!
Very Well!