Years of Rewards: $35 Bil From Charter Communications Stock

Years of Rewards: $35 Bil From Charter Communications Stock

In the last five years, Charter Communications (CHTR) stock has returned $35 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, CHTR stock has returned the 49th 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.

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 CHTR. (see Buy or Sell Charter Communications Stock for more details)

Charter Communications Fundamentals

• Revenue Growth: -0.6% LTM and 0.5% last 3-year average.
• Cash Generation: Nearly 8.1% free cash flow margin and 24.3% operating margin LTM.
• Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for CHTR was -0.6%.
• Valuation: Charter Communications stock trades at a P/E multiple of 5.6

*LTM: Last Twelve Months

The table gives a good overview of what you get from CHTR stock, but what about the risk?

CHTR Historical Risk

CHTR isn't immune to big drops. It fell about 35% during the 2018 correction, around 31% in the COVID sell-off, and more than 63% during the recent inflation shock. Even with solid fundamentals, these swings show the stock can take serious hits when markets turn sour. Good business doesn't erase risk in turbulent times.

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 CHTR 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.