Balance
sheets
“look
healthy,”
cash
flow
generation
is
“attractive,”
and
dividends
and
buybacks
are
set
to
be
resilient,
Goldman
Sachs
says.
“Shareholder
returns
are
poised
to
reach
an
all-time
high,”
the
bank
said
in
an
April
23
note.
It
expects
Europe’s
Stoxx
600
to
return
500
billion
euros
($536
billion)
to
shareholders
via
dividends
and
buybacks.
“This
implies
a
5%
yield.
The
yield
differential
with
the
S
&
P
500
is
the
widest
ever
which
makes
European
equities
a
reasonable
alternative
to
the
US,”
Goldman
wrote.
While
dividends
remain
the
main
source
of
returns
in
Europe,
buybacks
are
growing,
it
noted.
“Indeed,
the
main
buyers
of
equity
in
recent
years
have
been
corporates,
via
share
buybacks.
Even
corporate
insiders,
executives
and
officers
are
buying
more
shares
in
their
own
firms
than
they
are
selling,”
the
bank
said.
Dividends
have
been
in
the
spotlight
recently,
with
a
number
of
tech
giants
—
such
as
Meta
and
Alphabet
—
offering
them
for
the
first
time.
But
not
all
stocks
offering
buybacks
and
dividends
are
equal,
Goldman
said.
“For
example,
year-to-date,
high
buyback
yield
stocks
have
outperformed
low
buyback
stocks.
In contrast,
high
dividend
yield
stocks
underperformed
low
dividend
yield
stocks,”
it
said.
It
highlighted
its
baskets
of
buyback
stocks
for
a
diversified
strategy.
This
basket
offers
a
high
single-digit
yield
with
roughly
4%
via
buybacks
plus
4%
via
dividends
—
with
a
sector
breakdown
as
close
as
possible
to
the
market,
said
Goldman.
These
are
some
stocks
in
the
basket.
—
CNBC’s
Michael
Bloom
contributed
to
this
report.
