NVIDIA Stock Pays Out $83 Bil – Investors Take Note

In the last decade, NVIDIA (NVDA) stock has returned a notable $83 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.

As it turns out, NVDA stock has returned the 25th 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.

Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Should you buy one stock you like or build a portfolio designed to win across cycles? Our numbers show that High Quality Portfolio has turned stock-picking uncertainty into market-beating consistency. This portfolio is incorporated in asset allocation strategy of Empirical Asset Management – a Boston area wealth manager and Trefis partner – whose asset allocation framework yielded positive returns during the 2008-09 period when the S&P lost more than 40%.

Top 10 Stocks By Total Shareholder Return

For full ranking, visit Buybacks & Dividends Ranking

What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. 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: 71.6% LTM and 92.0% last 3-year average.
• Cash Generation: Nearly 43.6% free cash flow margin and 58.1% operating margin LTM.
• Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for NVDA was 9.9%.
• Valuation: NVIDIA stock trades at a P/E multiple of 50.7
• Opportunity vs S&P: Compared to S&P, you get higher valuation, higher revenue growth, and better margins

*LTM: Last Twelve Months

That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.

NVDA Historical Risk

That said, Nvidia isn’t immune to big drops. It fell 68% in the Dot-Com bubble and took an even harder hit of 85% in the Global Financial Crisis. During the inflation shock, it dropped about 66%, while the 2018 correction and Covid pandemic pulled it down 56% and 38%, respectively. Even with solid fundamentals, Nvidia’s history shows it can suffer steep losses when markets turn.

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 3 – 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.