Goldman Sachs (NYSE:GS) has recently compiled a list of stocks offering the most significant combination of trailing buyback and dividend yields, with Marathon Petroleum (NYSE:MPC), the oil refiner, leading the pack, as reported on Monday. The analysis is based on the belief held by some investors that substantial share buybacks and dividend payouts contribute to robust stock performance.
Marathon Petroleum delivered a buyback yield of 26% and a dividend yield of 3%, resulting in a total cash return yield of 29%. Following Marathon Petroleum, Synchrony Financial (NYSE:SYF), the credit card company, offered a total cash return yield of 19% with a buyback yield of 16% and a dividend yield of 3%.
Other companies that made it to the top of the list include M&T Bank (NYSE:MTB) and Marathon Oil (NYSE:MRO), both with a total cash return yield of 15%. Cardinal Health (NYSE:CAH), MGM Resorts (NYSE:MGM), and Tapestry (NYSE:TPR) all offered a total cash return yield of 13%. C.H. Robinson Worldwide and Expeditors International (NASDAQ:EXPD) of Washington rounded off the list with a total cash return yield of 12%.
Morningstar analysts provided assessments for some of these companies. Marathon Petroleum earned a narrow moat rating due to its high-grade portfolio and operational cost improvements. The company's returns are supported by cost advantages relative to global refiners. On Monday, Marathon's stock was quoted at $154 against Morningstar's fair value estimate of $126.
Synchrony Financial did not receive any moat rating. The company partners with retailers and medical providers to offer promotional financing as well as private-label and co-branded general-purpose credit cards. According to Morningstar analyst Michael Miller, Synchrony's credit cards can face significant headwinds when retail sales suffer. The company's stock was quoted at $31.70 on Monday against Morningstar's fair value estimate of $42.
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