The call from Goldman Sachs may not look like much on the surface, but investors who are holding all of these 10-year Treasury notes and 30-year Treasury Bonds better understand that the safety they purchased in uncertain times could literally come with years’ worth of interest and coupon payments gobbled up if rates rise handily.

Goldman Sachs sees 10-year U.S. Treasury yields rising from 2.03% or so today to 2.25% in the next few months and to as high as 2.50% by the end of 2013. The firm also sees inflation-adjusted TIPS rising back into positive yields from negative yields as of now. Get ready for higher yields in Japan as well. Goldman is now expecting that Japanese Government Bond yields will rise to 1.0% rather than 0.8% by the end of 2013.

So, what does this really mean to you and your money?

Investors should not have to panic over a 50 basis point rise all that much on the surface. The problem is that once rates rise, they have historically not just risen by 50 basis points or so and then stabilized. Rate cycles have historically risen much more and the only difference now is that we are coming off of historic low yields and investors currently do not demand as high of a “return on capital” after a period that a “return of capital” was temporarily good enough.

What investors need to brace for is what happens if rates rise 100 basis points or more say over the course of a year. If the 30-year long bond rises 100 basis points in a short period of time then the holder of that Treasury Bond will see the face value or market price of that bond fall by about 15% or a tad worse.

Many investors do not realize the price risk in long-dated Treasury and other bonds because bonds have been in a secular bull market for so long. The real risk is if interest rates rise 150 basis points, 200 basis points, or even more. Most long-term Treasury investors are not really prepared for that sort of move. Most would even feel like they had been duped by the Fed and the government if the value of their long-term bond portfolio is suddenly worth 10%, 20%, or even 30% less than what they paid.

Rates will ultimately go higher. What remains up for debate is when and by how much.

Some key takeaways are that Immelt said the U.S. economy is getting a little better every day. GE Capital was shown to have ended the first quarter of 2013 with $402 billion in assets, and the goal is to get those assets down to $300 billion to $350 billion by the end of 2014. GE sees the U.S. at 45% of its industrial revenue, 35% for its growth markets, followed by 20% for Japan and Europe.

GE said that there is no change in the framework projected in 2013. The company has taken heat for not growing in total, but cutting GE Capital down in size is the reason here. 2013 industrial segment revenue in 2013 is expected to be 2% to 6% organic growth, while GE Capital revenues are projected to be -5% to flat in 2013. Earnings growth in the industrial segment is put at double-digit growth. GE also expects to return about $18 billion worth of cash back to its shareholders.

IMMELT’S FULL PRESENTATION HERE

Whatever the expectations are, GE is continuing on its recovery path. Shares just hit a post-recession high and 52-week high of $24.13 on the day, and the current gain is 1.8% to $24.08, against a consensus analyst price target of $25.40. GE still outyields most DJIA components and conglomerates with a 3.2% dividend for its common stock.

We compared the top domestic dividend ETFs against the one “stock buyback ETF” and the numbers were clearly in favor of the buyback ETF. We also chose to go back further, comparing our favorite ETF of each category (buybacks versus dividends) to see which is doing better through time against the other. All performance measures were made first from the last trading day of 2012 through the close on Tuesday, May 21, 2013. Other comparisons were made from year-end to year-end, based on the dividend-adjusted closing prices of each on the last trading day of each year.

The PowerShares Buyback Achievers (NYSEMKT: PKW) is the one “stock buyback ETF” that investors can easily purchase. The other mimic ETFs are thin in volume. The PKW has about $535 million in assets now, and its net expense ratio is 0.71%. This ETF of course has many dividend payers in the fund, but the focus on share buybacks lends credibility that it buys stocks that are buying back close to 5% of their float each year. The buyback ETF is actually up 22.8% so far in 2013.

SPDR S&P Dividend (NYSEMKT: SDY) ETF is our favorite ETF that focuses solely on dividends because it tracks the S&P High Yield Dividend Aristocrats Index, as it is composed of companies that keep raising their dividends through good times and bad. The SPDR version of the dividend ETFs has more than $12 billion in assets and a gross expense ratio of 0.35%. This ETF was up 21.4%, after adjusting for dividend payments year-to-date in 2013.

Just to keep things honest, we also went back to the other key domestic dividend ETFs and the PowerShares Buyback Achievers (NYSEMKT: PKW) gain of 22.8% so far in 2013 trumps all of these others:

• iShares has two key ETFs here for dividends: iShares High Dividend Equity (NYSEMKT: HDV) was up 19.0% so far in 2013, while the iShares Dow Jones Select Dividend Index (NYSEMKT: DVY) was up 18.1% so far in 2013.
• Vanguard also has two of these in dividends: the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) was up 17.1% so far in 2013, while the Vanguard High Dividend Yield Index ETF (NYSEMKT: VYM) was up 19.1% so far in 2013.

If you want to know about the dividend yields alone, here are the current dividend yields represented by each fund family: PowerShares Buyback ETF 12-month yield is 0.95% and the SPDR Dividend ETF is 2.66%. Now, what about the share performance through time since the end of the recession, comparing PowerShares Buyback Achievers (NYSEMKT: PKW) against the SPDR S&P Dividend (NYSEMKT: SDY) ETF?

• 2012: PKW 13.7% and SDY 11.6%
• 2011: PKW 6.7% and SDY 7.2%
• 2010: PKW 17.8% and SDY 15.5%
• 2009: PKW 31.2% and SDY 19.2%

One common investing theory is that investors should prefer dividends over stock buybacks and share repurchases. After all, buyback plans may be based on short-term share price decisions. Continually higher dividends are intended to signal that a company believes that it will have stable and/or growing earnings through time, regardless of the conditions of today. We have evaluated these before, but it is amazing that the math keeps holding in the bull market in favor of buybacks over dividends in all but one of the post-recession years.

Here we have the holdings of each ETF, to give a representation for the differences between dividend companies and those that also have both dividends and buybacks.

Investors need to understand that MLPs are technically “units” rather than shares, as these are partnership interests rather than shares of stock. The largest MLP conference of the year is on tap, and the mood is expected to be considerably more festive this year than last year. Fundamentals remain strong, particularly in the oil production area, though pipeline additions are contributing to falling basis. Natural gas liquids (NGL) production continues also to surprise to the upside, especially in the Marcellus and Utica shale plays.

Here are Credit Suisse’s top MLPs to buy now for the next 12 months.

Williams Companies Inc. (NYSE: WMB) is the top stock to buy at Credit Suisse. The company’s strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and increase in stock price during the past year. The Credit Suisse price target for the stock is $49. The Thomson/First Call estimate is $40.50. Shareholders receive a 3.60% distribution. Remember, MLP distributions can contain return of principal.

QR Energy L.P. (NYSE: QRE) may be a stock to buy for yield-hungry investors. QR Energy recently has expanded into the Permian Basin, and it now makes up 35% of production and proved reserves. Credit Suisse has a $20 price target, and the consensus is at $20 as well. Investors are paid a whopping 11.20% distribution.

Cheniere Energy Inc. (NYSEMKT: LNG) is the operator of the coveted Sabine Pass LNG terminal and is the leader in the export of the product. Credit Suisse has a $38 price target, but the consensus target is much lower at $32. The company does not pay a distribution.

Targa Resources Corp. (NYSE: TRGP) recently completed a $625 million senior note offering to reduce current borrowing costs. Credit Suisse has an $82 target on this top name. The consensus is much lower at $73. Shareholders are paid a 2.90% distribution.

Cheniere Energy Partners L.P. (NYSEMKT: CQP) is a subsidiary of Cheniere Energy. This is the Cheniere entity that actually owns and operates the Sabine Pass LNG terminal. Credit Suisse has a $31 target for the stock. The consensus is $26, which is below its current trading level. Shareholders are paid a solid 6.00% distribution.

Crosstex Energy L.P. (NASDAQ: XTEX) engages in gathering, transmission, processing and marketing natural gas, natural gas liquids (NGLs) and crude oil primarily in the north Louisiana, north Texas and Ohio River Valley. Credit Suisse has a $22 price objective, while the consensus is at $21. Shareholders receive a very nice 6.40% distribution.

Access Midstream Partners L.P. (NYSE: ACMP) is one of the MLP names to buy. The company has established a large-scale position in all the key unconventional basins in the United States. Credit Suisse’s $46 price target is right in line with the consensus target. Investors are paid a 4.30% distribution.

Genesis Energy L.P. (NYSE: GEL) announced it will expand its existing rail terminal in Natchez, Miss., designed to handle straight and minimally diluted bitumen delivered by the Canadian National Railway, and construct a new unit train loading facility in the heart of the Powder River Basin of the Niobrara Shale Play. Credit Suisse has posted a $53 price target. The consensus is at $51. Investors are paid a 3.80% distribution.

The Credit Suisse team has stressed and continues to emphasize a more defensive posture, and they are focusing their attention on large, relatively liquid, investment grade MLPs or affiliates with exposure to the coming crude oil production boom in North America. Given the solid run by MLP names so far this year, that advice makes good sense for investors.

Guidance for the quarter is being offered to the downside as well. NetApp sees earnings at $0.45 to $0.50 per share and for revenues to be in the range of $1.475 billion to $1.575 billion. Unfortunately this is soft guidance as earnings are expected to be $0.53 per share and $1.6 billion in sales.

NetApp will increase its current stock repurchase program by an additional $1.6 billion. With the $1.4 billion which remains available that brings the total up to $3 billion. The buyback plan expires in three years. The company did signal that it expect that the outstanding share count to decrease to approximately 367 million shares, a signal that the buyback will go into effect.

NetApp declared a quarterly dividend of $0.15 per common share, and the company said up front that it intends to increase its payout over time. The first dividend will be payable on July 23, 2013 to shareholders of record as of the close of business on July 11, 2013. Investors will have a 1.6% dividend yield based upon the $36.63 closing price.

Now for the bad news is you are one of the 12,000 or so employees. A portion of the press release shows a “Resource Realignment” section, which is simply a layoff announcement. NetApp represented this as “a realignment of resources and restructuring which includes a global workforce reduction of approximately 900 employees.” Those layoffs will result in charges of $50 to $60 million related to employee severance and other restructuring charges. If you are one of those fired workers, you will at least know that your sacrificed job will help your former employer keep spending money to buy back the stock and to send out quarterly dividends to the shareholders.

NetApp shares closed down 1.5% at $36.63 against a 52-week range of $26.26 to $39.15. So far shares are up by 2% at $37.40 or so in the after-hours. That $3 billion for share buybacks compares to a market cap of $13.2 billion.

Back on April 12 along with earnings, the bank’s press release said, “As previously announced, the Board of Directors intends to increase the second-quarter common stock dividend to $0.38 per share from the current $0.30 per share, returning the dividend to its highest level. The Board has also authorized the Firm to repurchase $6 billion of common equity commencing with the second quarter of this year through the end of the first quarter of 2014. During the first quarter of 2013, the Firm repurchased $2.6 billion of common equity. The Federal Reserve asked the Firm to submit by the end of the third quarter an additional capital plan addressing the weaknesses it identified in the Firm’s capital planning processes. The Firm is dramatically increasing the resources deployed and intends to fully address their requirements. Following their review, the Federal Reserve may require the Firm to modify its capital distributions.”

Shares of J.P. Morgan Chase have hit a new post-recession high today. The higher dividend is payable on July 31, 2013 to stockholders of record at the close of business on July 5, 2013. At $53.43, the old dividend yield would be about 2.25%. The new dividend yield will be closer to 2.85%. As we pointed out that the old dividend was in place, most of the online financial website stock ticker screens already reflect the higher declared payout.

The bank’s press release confirmed that it will be officially keeping Jamie Dimon as both Chairman and as Chief Executive Officer. The annual shareholder meeting showed that the vote to split the roles of Chairman and CEO received only 32% of the votes.

While a vote of 32% of voting to split the roles might seem high, this is actually more supportive than it was in 2012 when shareholders voted some 40% of the votes to split the CEO and Chairman roles. It appears that Jamie Dimon won about 98% of shareholder support to remain as a director. All of the company’s directors were reelected as well.

Shares of J.P. Morgan hit a new post-recession high and the new 52-week trading range is $30.83 to $53.67.

What is so interesting here is that Apple is sounding more and more like any other company that wants to maximize its tax benefits within the existing laws. Taxation of foreign income is an ongoing hot-button and it will be interesting to see exactly how this debate will take place now that it includes Apple. Will the public continue to think that Apple can do no wrong?

Apple’s defense starts out that it is likely the highest paying corporation for income taxes in America. It also talks about employing tens of thousands of Americans and pays billions of dollars each year to the US Treasury in corporate income and payroll taxes. Keep in mind that Apple now has well over $100 billion in cash. The company would also have to pay out billions upon billions of dollars that would be a penalty if the company brought that cash back into the U.S.

The company said, “Apple welcomes an objective examination of the US corporate tax system, which has not kept pace with the advent of the digital age and the rapidly changing global economy. The Company supports comprehensive tax reform as a necessary step to promote growth and enable American multinational companies to remain competitive with their foreign counterparts in both domestic and international markets.”

Apple will claim that it has created or supported approximately 600,000 jobs in the US, broken down as 50,000 by the company and another 550,000 or so at other companies. Some 290,000 of those are tied to the new “app economy.” Apple also claims that its 2012 U.S. tax bill of $6 billion is close to $1 of every $40 in income received from corporations. It showed a 30.5% tax rate last year and expects to pay closer to $7 billion in 2013. Here are some additional bullet points:

• Apple has been a powerful engine of job creation in the US.
• Apple pays an extraordinary amount in US taxes.
• Apple does not use tax gimmicks.
• Apple carefully manages its foreign cash holdings to support its overseas operations in the best interests of its shareholders.
• The dividends distributed among Apple’s international affiliates, including AOI, are not subject to US corporate income tax.
• Apple’s cost sharing agreement with two of its subsidiaries supports high-paying, tax-revenue generating jobs in the US.
• AOI performs important business functions that facilitate and enhance Apple’s success in international markets; it is not a shell company.
• Apple supports comprehensive reform of the US corporate tax system.

The company’s full pre-testimony report is here.

The $6.5 billion will be paid in two parts. The first is a normal $2 billion earnings distribution. The second is a special dividend of $4.5 billion. Immelt confirmed the plans to continue shrinking GE Capital.

The earnings distribution is roughly 30% back to the parent. While we expect a higher dividend from GE in late 2013, the special dividend payment is more than two-thirds of the distribution. Even with some $68 billion in cash on the GE Capital balance sheet, higher normalized dividends usually require steady income rather than a special dividend to get to steadily higher dividends.

GE has told us that if it can trim GE Capital by 10% of its total portfolio, then it will be valued more as an industrial conglomerate rather than a conglomerate too dominated by the finance unit. GE did confirm that it still plans to return $18 billion cash to its shareholders in 2013, including the repurchase of some $10 billion of common stock.

To keep things even for U.S. investors, we screened out the ADRs held by Buffett and Berkshire Hathaway Inc. (NYSE: BRK-B) even though one is mentioned at the end of the screen to keep them on the list. Of the dozens of stocks held by the conglomerate, these are the eight highest dividends in the Buffett portfolio. We have put the stocks in order of the highest yields first and added in color on each if applicable. As you will see, most of the Buffett top dividend yields still offer upside to their consensus price targets for value investors looking for growth.

ConocoPhillips (NYSE: COP) leads the list with a common stock dividend yield of 4.2%. The company has pledged to keep its dividend strong, and this puts it higher than other oil giants. This stock is now within about 1% of new 52-week highs and the $62.42 share price compares to an analyst consensus price target of about $63.98.

Gannett Co. Inc. (NYSE: GCI) has a surprising yield of 3.6% for its common stock holders. This remains a small holding of Warren Buffett but investors might be surprised that the newspaper and media stock has risen to the point that it is up almost 100% from its 52-week low. At $21.62 as of now, the stock trades right at the $21.61 consensus analyst price target, and the 52-week trading range is $12.17 to $22.21.

General Electric Co. (NYSE: GE) offers a 3.3% yield, partly because shares have pulled back since earnings. The earnings report was not stellar by any means, but we think GE shares were sold off too hard after earnings when you consider the state of the bull market. Shares are at $23.24, and GE’s 52-week high is $23.90. Analysts have a consensus target price of $25.33. GE is likely to have a dividend hike yet again later this year.

Wells Fargo & Co. (NYSE: WFC) is a top bank and Buffett keeps buying more and more of this stock each and every quarter. The 3.2% common stock yield is rather impressive, and this remains at the top of the seven safest banks in America. This bank is challenging the highs from before the recession again, if you back out the dividend payments. At $39.30, its stock hit that multiyear high on May 15, and analysts have a consensus price target of $40.76.

Procter & Gamble Co. (NYSE: PG) has lifted its dividend and is yielding 3.1% after a dividend hike in April. Buffett has trimmed the stake here over time, but activist investors have been on management’s back and pressing it to run the company better. If P&G keeps up its efforts, it could be worth even more. The market cap of $221 billion already makes it one of the largest public companies out there. With shares at $80.68, the consensus analyst target price is $82.78.

J.P. Morgan Chase & Co. (NYSE: JPM) is a personal holding of Warren Buffett rather than Berkshire Hathaway. The bank pays a 3.1% dividend, despite not getting to be as aggressive on its capital plans. Jamie Dimon has been under fire here to split the CEO and chairman roles, but Buffett recently has praised Dimon as a great CEO who also deserves his chairman role. We would caution that one analyst showed that some $20 billion (10% of the share price) could come out of the stock if Dimon leaves the bank because there is a management replacement vacuum right now with no heir apparent. With shares at $51.09, the consensus analyst target is $56.21.

Johnson & Johnson (NYSE: JNJ) recently raised its dividend. The drug and consumer products giant has been a habitual dividend-raising machine, and its product quality controls appear to be over. The 3.1% payout is impressive when you consider that this stock just hit an all-time high on May 15. Note that the consensus analyst price target of $86.50 is actually less than the current price of $87.64.

United Parcel Service Inc. (NYSE: UPS) ranked as number eight with a dividend yield of 2.8%. This comes as the stock is challenging all-time highs, and the shipping giant has raised its dividend payment consistently. With shares at $88.60, analysts have a consensus price target of $93.09 on the stock.

GlaxoSmithKline PLC (NYSE: GSK) is the ADR of the group, and it was only included because it screens out as having such a high yield at 4.3%. That would have put it at the top of the list. As this is an ADR and subject to currency changes altering the payouts each time in dollars for ADR holders, we are only representing the Yahoo! screen for the nominal payout rather than adding color here.

Jon C. Ogg

*The full Buffett and Berkshire Hathaway portfolio can be seen here.

Apple’s (NASDAQ: AAPL) exceptionally large cash reserve led it to recently announce that it would expand the amount of funds to be returned to its shareholders through dividends and stock repurchases. But during the period Apple’s “capital return” program spans, Apple’s forecast earnings exceed the amount to be returned from its cash reserve, suggesting that, on balance, Apple’s cash reserve may still increase over the next few years.

Here’s the math. Under the program a total of $100 billion of Apple’s cash reserve is to be returned to shareholders through increased dividends and its share repurchase program by the end of 2015. Apple’s financial statements indicate that $9 billion has already been distributed to shareholders, which leaves another $91 billion to be returned. Based on the consensus earnings forecast for Apple, the company will earn about $125 per share between now and the end of calendar 2015, which translates to about $110 billion in net income. Thus, a rough forecast of Apple’s net income between now and the end of 2015 is nearly $20 billion higher than the amount remaining to be distributed under the capital return program. This differential suggests that Apple’s cash position may continue to grow over the next few years.

The continued exceptional health of Apple’s cash reserve suggests that a significant share of it could be used to advance other priorities without harming the company’s financial security. As discussed here, with Apple shareholders taken care of by the capital reserve program, Apple should now turn its attention to using its cash reserve to address the labor rights violations suffered by the workers making the company’s products.