Over the last five years, Nvidia (NVDA) stock has returned a notable $97 billion back to its shareholders in cold, hard cash via dividends and share buybacks. But how does that stack up against the market’s other great capital-return machines? The numbers tell an interesting story.
As it turns out, NVDA stock has returned the 12th highest amount to shareholders in history.
Why should you care?
Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
For full ranking, visit Buybacks & Dividends Ranking
Top 10 Stocks By Total Shareholder Return
What do you notice here?
The total capital returned to shareholders as a % of the current market capitalization appears inversely proportional to growth prospects for re-investments.
Stocks like Meta (META) and Microsoft (MSFT) are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.
That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for NVDA. (see Buy or Sell NVIDIA Stock for more details.)
NVIDIA Fundamentals
- Revenue Growth: 65.5% LTM and 101.8% last 3-year average.
- Cash Generation: Nearly 44.8% free cash flow margin and 60.4% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for NVDA was 65.5%.
- Valuation: NVIDIA stock trades at a P/E multiple of 36.2
NVDA Historical Risk
Nvidia isn’t immune to big drops. It fell about 68% in the Dot-Com Bubble and even more, 85%, during the Global Financial Crisis. The 2018 correction hit it by 56%, and the inflation shock in 2022 took it down 66%. Even during the Covid pandemic, the dip was still nearly 38%. Strong fundamentals don’t stop sharp sell-offs when fear hits the market hard.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read NVDA Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all three: the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
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