Goldman took advantage of the lucrative aid offered to it during the financial crisis. The firm opted to become a bank holding company, a double-edged sword that couples access to dirt-cheap liquidity with tightened regulations from Uncle Sam. Ultimately, the increased scrutiny isn't a bad thing -- it helps to prevent Goldman from conspicuously over-leveraging itself in chase of returns. Yes, that does mean that Goldman's profit potential is reduced, but the bigger market share and more lucrative businesses that the firm has been enjoying post-recession should easily offset that.
A big part of Goldman's shareholder yield came from a hefty reduction in its debt load. That said, the firm's leverage is still enormous -- but that should pay off as interest rates begin to normalize again. With the Fed already tempering its "low rates forever" language of the past, those returns could come sooner rather than later.
Computer maker Dell (DELL - Get Report) has had a rough year in 2012 -- shares of the $18 billion firm have slid almost 30% since the first trading day in January. That's not a huge surprise: the firm's main business has become increasingly commoditized in the last decade, and its consumer electronics units have produced more flops than success stories. But between the slide in share price and the 19% shareholder yield Dell has paid out in the last year, this stock is a whole lot cheaper than it was back in January 2012.There's no question that the PC business is unattractive right now. With the exception of Apple (AAPL), one PC maker doesn't offer anything different from the others, and margins have suffered as competition heated up. So instead, Dell has been looking for more lucrative returns in the enterprise IT space, a high-dollar market that's got more room for differentiation among suppliers. Dell dived in with both feed, shelling out tens of billions of dollars to acquire enterprise firms, a strategy that's already paying off on the firm's income statement. There's no two ways about it: Dell is a bargain stock right now. With more than $5 billion in cash and investments on its balance sheet after debt is cancelled out, close to 30% of the firm's market capitalization is paid for in cold hard cash. That gives Dell an effective P/E ratio of 5 at current price levels. Competition is fierce in the enterprise IT space right now, but Dell's premium name and its ability to execute give this firm a leg up for 2013.