4 Financial Stocks Rewarding Shareholders Two Ways: Dividends and Buybacks

Financial firms earn their money from fees, deals, and the assets they manage, and the most shareholder-friendly ones send a steady share of that money back to investors. The four NASDAQ-listed names below all pay a regular quarterly cash dividend and also buy back their own stock. That means shareholders collect income while their stake in each company slowly gets bigger. Carlyle Group (NASDAQ:CG | CG Price Prediction) alone has bought back or withheld a record 15 million shares so far this year. All four share one caution: their profits rise and fall with deal activity and market-driven fees, so the safety of each dividend matters as much as the yield (we laid out the seven warning signs a big payout is about to be cut in a free dividend trap guide).

Carlyle Group

Carlyle is an alternative asset manager. It raises money from pensions, endowments and wealthy investors and invests it in private equity, private credit and secondaries. It earns management fees on that money plus a cut of investment profits. The stock yields 3.53% on a quarterly payout of $0.35, which works out to $1.40 per share annually. The next check is payable Nov 23.

Dividend safety: Carlyle earned distributable earnings (the cash-based profit measure asset managers report) of $1.12 per share in the third quarter, compared with that $0.35 quarterly dividend. Year-to-date distributable earnings came to $3.08 per share. The most reliable part of that income is fee-related earnings: $292.6 million in the quarter at a 47% margin. Carlyle closed the quarter with over $7 billion of balance sheet assets, or almost $20 per share, including $1.58 billion in cash. The dividend has been exactly $0.35 every quarter since the May 2023 ex-dividend date, following increases from $0.25 to $0.325 and then to $0.35. Buybacks continue, with 4.5 million shares for $210 million bought back or withheld in the third quarter and about $1.4 billion left on the $2.0 billion authorization.

Bull case: Carlyle has $28 billion of pending fee-earning assets, up 48% year over year. Management expects that money to produce more than $230 million of annualized management fees once fully activated. The chief executive described the firm as “at the very beginning of our multi-year fundraising super cycle.” Meanwhile, the stock is down 28.47% year-to-date at $41.40 and trades at about 8 times forward earnings. Income buyers are getting a growing fee stream at a discounted price.

Risk: Performance income swings. Reversals of unrealized carried interest produced a GAAP pre-tax loss of $76.9 million, and management expects a realized infrastructure-fund loss of about $222 million in the fourth quarter.

LPL Financial

LPL Financial (NASDAQ:LPLA) is a broker-dealer that works behind the scenes for independent financial advisors. It supplies the trading, advisory platform, technology, and compliance support that lets advisors run their own practices. In return, it collects a share of advisory fees, commissions, and client cash income. The yield is a modest 0.41% on a $0.30 quarterly dividend. Most of LPL’s capital return comes through buybacks rather than the dividend.

Dividend safety: Coverage is very strong. Third-quarter adjusted EPS hit a record $5.97, compared with that $0.30 quarterly dividend, and trailing EPS stands at $17.45. LPL returned $324.2 million to shareholders in the quarter, including $301 million of buybacks. Management said, “As we look ahead to Q4, we plan to repurchase another $300 million.” On July 23, the board added $2.5 billion to the repurchase authorization. Leverage was 1.93x on $7.8 billion of total debt, slightly below the center of its target range, with $563 million of corporate cash. The dividend held at $0.25 from 2015 through late 2022 and has been $0.30 every quarter since.

Bull case: Revenue rose 17.4% to $5.34 billion, and advisory assets reached $1.6 trillion. Organic net new assets came to $29 billion. Advisors from the Commonwealth Financial Network acquisition begin moving onto LPL’s platform in mid-November, and management expects the deal to reach run-rate EBITDA of about $415 million. The stock trades at about 10 times forward earnings and has a beta of 0.544, making it the steadiest stock in this group.

Risk: Management is reviewing its cash-sweep pricing and platform fees and expects to share more “in the first half of next year.” Client cash revenue brought in $472 million in the third quarter, so any pricing changes there would affect earnings.

Perella Weinberg Partners

Perella Weinberg Partners (NASDAQ:PWP) is an independent advisory boutique. It advises companies on mergers, restructurings, and capital raising, and it mostly gets paid when a deal closes. The stock yields 2.07% on a $0.07 quarterly dividend, with the next payment on Dec 8.

Dividend safety: The strongest safety argument rests on the balance sheet: $150 million in cash and no debt. Third-quarter adjusted EPS was $0.39 (GAAP diluted EPS of $0.21), compared with the $0.07 quarterly dividend. The dividend has been exactly $0.07 each quarter since 2021, with no increases or cuts. Year-to-date, Perella returned $88.3 million to equity holders through dividends, open-market repurchases and net settlement of employee stock awards. Buybacks have been temporarily limited while capital went to the Gleacher Shacklock acquisition, which closed Sept. 1.

Looking at the bull case: third-quarter revenue jumped 52.7% to $251.4 million, and the adjusted operating margin expanded to 22.8% from 10.6%. The firm added 14 partners and 13 MDs this year, and the chief executive pointed to “strong momentum into the fourth quarter and 2027.” The stock is down 18.83% year-to-date at $13.88, so income buyers can lock in a higher starting yield.

Risk: Advisory fees depend on deals closing, and that makes revenue lumpy. First-half revenue was down 17% before the third-quarter rebound, and a slowdown in dealmaking would hit earnings quickly.

Patria Investments

Patria Investments (NASDAQ:PAX) is an alternative asset manager focused on Latin America. It invests in private equity, infrastructure, credit, and real estate across the region. The company is based in the Cayman Islands and files with the SEC as a foreign private issuer, but its Class A shares trade on the NASDAQ. At 6.6%, it is the only ultra-high-yield stock in the group. The quarterly dividend is $0.1625, payable Dec 11.

Dividend safety: Third-quarter distributable earnings were 30 cents per share, compared with the $0.1625 quarterly dividend. Year-to-date distributable earnings reached $0.88 per share, up 14%. Fee-earning assets grew 24% to $48.1 billion, and management says “Nearly 90% of our fee-earning AUMs have no or limited redemption.” That locked-up capital gives the payout a stable fee base. The dividend rose from $0.15 to $0.1625 starting with the May ex-dividend date. Before 2025, payments changed from quarter to quarter. On buybacks, management aims to hold shares outstanding at around 160 million shares and had made $12.7 million of treasury share purchases by midyear.

Bull case: Patria raised $6.9 billion year-to-date, reaching its full-year target one quarter early. Management confirmed a 2027 fee-related earnings target of $1.60 to $1.80 per share. The stock is down 37.41% year-to-date at $9.56 and trades at about 8 times forward earnings.

Risk: Patria still owes cash on past acquisitions, and those payments plus planned buybacks run through 2028. It also carries $345.5 million of non-current loans, and IFRS net income fell 68% on higher finance expense.

Four Ways to Collect From Wall Street’s Fee Machines

Each of these four firms earned more than it paid out in its latest quarter and is reducing or holding its share count, so income investors get paid twice: through the dividend and through a growing ownership stake. LPL offers the most protection, Carlyle and Perella sit in the middle, and Patria pays the most cash in exchange for more balance sheet risk. Because all four depend on deal flow and market-driven fees, the next round of fundraising totals and deal exits will decide whether these payouts keep growing.

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