MW Goldman Sachs has the top rank among the S&P 500 by this remarkable statistic
By Philip van Doorn
The investment bank has consistently rewarded its shareholders
Goldman Sachs's stock returned 103.8% for five years through April 10, 2026, with dividends reinvested. That performance has been supported by two consistent activities by the investment bank's board of directors.
Goldman Sachs kicked off its first-quarter earnings season on Monday. While the initial reaction in the stock market was a collective yawn, a five-year lookback shows that long-term investors have been treated very well by the company's board of directors.
Goldman $(GS)$ beat analysts' expectations for first-quarter revenue and earnings per share. But the consensus estimates were high, so there may have been some disappointment leading to a 3% decline for the stock in early trading.
Then again, this might be a classic Wall Street "sell the good news" reaction. Goldman's stock was, arguably, relatively expensive heading into earnings, with a forward price/earnings ratio of 14.8. That's Friday's closing price divided by the consensus 12-month earnings-per-share estimate among analysts polled by LSEG. The Invesco KBW Bank ETF KBWB, which tracks the KBW Nasdaq Bank Index BKX, was trading at a weighted forward P/E of 11.9, according to LSEG's calculation.
One more element in a sell-the-news reaction might be Goldman's first-quarter return on average common shareholders' equity $(ROE)$ of 19.8%. This is much higher than the bank's own goal of a "midteens" ROE, which was reiterated by CEO David Solomon during the bank's first-quarter earnings call on Jan. 15.
A remarkable dividend compounder
Goldman Sachs raised its quarterly dividend to $4.50 from $4 a share during the first quarter. That makes for an annual payout of $18, for a dividend yield of 1.98%, based on Friday's closing price of $907.80.
A dividend yield of 1.98% is not very high for an investor seeking income. Then again, it is much higher than the S&P 500 index's SPX weighted dividend yield of 1.17%, according to FactSet.
High dividend yields can be value traps. A company's dividend yield might be high because of pressures on its share price caused by problems with its business and/or because investors expect it to cut its dividend.
An investor might be better off building investment income streams over time, and Goldman has provided an amazing example of how dividends can compound.
-- If you had purchased shares of Goldman Sachs five years ago at the market close on April 9, 2021, you would have paid $330.81 a share. At that time, the quarterly dividend was $1.25 a share, for an annualized payout of $5 a share. The dividend yield was 1.51%.
-- Goldman's stock closed at $907.80 on Friday. The quarterly payout is $6 a share, for an annualized dividend of $18 a share. That makes for the current dividend yield of 1.98%. But if you had held your Goldman shares for five years, your dividend yield based on what you had paid for those shares would have increased to 5.44%. Meanwhile, the share price increased 174%, while the S&P 500 increased 65%. If you had reinvested your dividends, your total return for five years on your Goldman stock would have been 209%, compared with a return of 78% for the index
-- Goldman's board of directors has increased the dividend during each of the past five years. The dividend's compound annual growth rate (CAGR) has been 29.2%. Meanwhile, repurchases of stock have caused the diluted share count used to calculate quarterly earnings per share to increase by 13%, which has boosted EPS.
So how does that five-year dividend CAGR of 29.2% stack up within the S&P 500? We narrowed the current S&P 500 to 217 companies whose dividend yields five years ago were at least 1.50%.
Among those 217 companies, these 20 top the list with the highest five-year dividend CAGR:
Company Five-year dividend CAGR Dividend yield on shares purchased five years ago Current dividend yield Five-year price change Five-year total return Goldman Sachs Group 29.2% 5.44% 1.98% 174% 209% Ares Management 23.5% 9.80% 5.38% 82% 112% Morgan Stanley 23.4% 4.96% 2.25% 120% 158% Diamondback Energy 21.3% 5.61% 2.23% 152% 211% EOG Resources 19.8% 5.68% 3.00% 90% 143% SLB 18.7% 4.41% 2.27% 94% 116% Coterra Energy 17.1% 5.06% 2.63% 92% 149% Devon Energy 16.9% 4.36% 2.01% 117% 179% Blackstone Inc. 16.0% 6.16% 4.13% 49% 77% Steel Dynamics 15.3% 4.14% 1.11% 272% 302% Eli Lilly 15.3% 3.75% 0.74% 409% 435% Snap-On 14.7% 4.14% 2.57% 61% 83% ConocoPhillips 14.3% 6.56% 2.74% 139% 186% Kroger 14.2% 3.71% 2.06% 80% 100% Aflac 13.1% 4.73% 2.20% 114% 140% TJX 13.0% 2.76% 1.19% 133% 150% Automatic Data Processing 12.8% 3.59% 3.60% 0% 11% Hershey 12.5% 3.64% 2.87% 27% 43% Broadcom 12.5% 5.36% 0.70% 666% 746% Equinix 12.4% 3.00% 2.00% 50% 65% Source: FactSet
Click on the tickers for more about each company.
Read: A guide to the information available on the MarketWatch quote page
The table includes yields based on the current payouts and the closing prices on April 9, 2021. Then it has current yields based on Friday's closing prices, and five-year price changes and total returns, with dividends reinvested on the right.
Among these 20 stocks, all but five beat the S&P 500's five-year price increase of 65% and all but four beat the S&P 500's five-year total return of 78%.
Goldman tops the list. Rival investment bank Morgan Stanley $(MS)$ ranks third. Morgan Stanley is scheduled to report its first-quarter results early on Wednesday.
Don't miss: Here are some bargain bank stocks heading into earnings season
-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 13, 2026 10:56 ET (14:56 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments