NVIDIA Hands Over Nearly $100 Billion To Shareholders

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Over the past ten years, NVIDIA (NVDA) stock has delivered an impressive $96 Bil back to its investors in the form of cash through dividends and buybacks. Let’s examine some figures and see how this distribution capability compares to the largest capital-returning companies in the market.

As it turns out, NVDA stock ranks as the 19th highest contributor to shareholder returns in history.

Why should you care? This is significant because dividends and share repurchases provide direct and tangible returns of equity to shareholders. They also reflect management’s assurance in the firm’s financial stability and capability to generate ongoing cash flows. Additionally, there are numerous other stocks meeting this criterion. Below is a list of the top 10 firms ranked by total capital returned to shareholders through dividends and stock buybacks.

Top 10 Stocks By Total Shareholder Return

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For the complete ranking, visit Buybacks & Dividends Ranking

What do you observe here? The total capital returned to shareholders as a percentage of the current market capitalization appears inversely related to growth potential for reinvestments. Companies like Meta (META) and Microsoft (MSFT) are expanding much more rapidly and in a more predictable manner than others, yet they have returned a smaller proportion of their market valuation to shareholders.

That’s the downside of elevated capital returns. Yes, they can be alluring, but it’s crucial to ask yourself the following: Am I compromising growth and solid fundamentals? With this in mind, let’s explore some data regarding NVDA. (see Buy or Sell NVIDIA Stock for further information)

  • Revenue Growth: 65.2% LTM and 91.6% last 3-year average.
  • Cash Generation: Nearly 41.3% free cash flow margin and 58.8% operating margin LTM.
  • Recent Revenue Shocks: The lowest annual revenue growth in the last 3 years for NVDA was 57.1%.
  • Valuation: NVIDIA stock has a P/E ratio of 45.9

The table provides a good overview of the returns from NVDA stock, but what about the associated risks?

NVDA Historical Risk

NVIDIA is not immune to significant sell-offs. It experienced an 85% drop during the Global Financial Crisis and suffered a 68% decline during the Dot-Com crash. The corrections in 2018 and the inflation shock wiped off more than 55% from its peak. Even the COVID-related dip reduced its value by approximately 38%. Solid fundamentals are essential, yet during market turbulence, NVDA still feels the effects.

However, the risks are not confined to major market collapses. Stocks tend to decline even in good markets – consider occurrences like earnings releases, business updates, and changes in outlook. Review NVDA Dip Buyer Analyses to understand how the stock has bounced back from sharp declines in the past.

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