Over the past decade, NVIDIA (NASDAQ: NVDA) stock has returned an impressive $83 Bil to its investors in the form of cash through dividends and buybacks. The payouts are only likely to pick up, as Nvidia retains the pole position in the AI silicon race, generating over $75 billion in operating cash flows over the last 12 months.
Let’s examine some statistics and see how this capacity for payouts compares with the market’s top capital-return generators.
SAN JOSE, CALIFORNIA – MARCH 18: Nvidia CEO Jensen Huang delivers the keynote address during the Nvidia GTC 2025 at SAP Center on March 18, 2025 in San Jose, California. The annual Nvidia GTC conference runs through March 20th. (Photo by Justin Sullivan/Getty Images)
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Interestingly, NVDA stock has provided the 25th largest total return to shareholders in history.
Why should you be concerned?
Because dividends and share repurchases are direct, tangible returns of capital to shareholders. They also indicate management’s confidence in the company’s financial stability and its capacity to produce sustainable cash flows. There are additional stocks with similar characteristics. Here is a list of the top 10 companies ranked by the total capital returned to shareholders through dividends and stock repurchases.
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Top 10 Stocks By Total Shareholder Return
For the complete ranking, visit Buybacks & Dividends Ranking
What stands out here? The aggregate capital returned to shareholders as a percentage of the current market capitalization seems inversely proportional to growth potential regarding reinvestments. Companies such as Meta (META) and Microsoft (MSFT) display much faster growth, in a more predictable manner, than the others, but they have returned a significantly smaller share of their market value to shareholders.
That’s the counterpoint to high capital returns. While appealing, it prompts the question: Am I forgoing growth and robust fundamentals? With this in mind, let’s analyze some figures for NVDA. (see Buy or Sell NVIDIA Stock for more information)
NVIDIA Fundamentals
- Revenue Growth: 71.6% LTM and 92.0% over the last 3-year average.
- Cash Generation: Nearly 43.6% free cash flow margin and 58.1% operating margin LTM.
- Recent Revenue Shocks: The lowest annual revenue growth in the past 3 years for NVDA was 9.9%.
- Valuation: NVIDIA stock trades at a P/E ratio of 50.7
- Opportunity vs S&P: In comparison to S&P, you are offered higher valuation, greater revenue growth, and improved margins
That provides a good summary, but assessing a stock from an investment viewpoint entails much more. That is precisely what Trefis High Quality Portfolio offers. It is tailored to mitigate stock-specific risk while providing upside potential.
NVDA Historical Risk
However, Nvidia is not safeguarded against significant declines. It plunged 68% during the Dot-Com bubble and experienced an even steeper drop of 85% in the Global Financial Crisis. During the inflation surge, it fell roughly 66%, while the corrections in 2018 and the Covid pandemic caused declines of 56% and 38%, respectively. Despite solid fundamentals, Nvidia’s history indicates it can experience substantial losses during market downturns.
But the risk isn’t confined to major market crashes. Stocks decline even in favorable market conditions – consider events like earnings reports, business updates, and changes in outlook. Read NVDA Dip Buyer Analyses to understand how the stock has rebounded from sharp declines in the past.
The Trefis High Quality (HQ) Portfolio, consisting of 30 stocks, has a proven history of consistently outperforming its benchmark which includes all three – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a category, HQ Portfolio stocks have generated superior returns with reduced risk compared to the benchmark index; providing a less volatile experience, as demonstrated by HQ Portfolio performance metrics.
