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This Oct. 2, 2014 file photo shows the facade of the New York Stock Exchange, in New York.Richard Drew/The Associated Press

The $1-trillion that U.S. companies are on track to return to shareholders this year will constitute the market's entire return in 2015, according to Goldman Sachs Group Inc.

Dividends and buybacks will be responsible for supporting a market where the median stock in the Standard & Poor's 500 Index is trading at 18.2 times earnings, putting it in the 99th percentile of historical valuation, the firm said in a note to clients. Goldman Sachs forecasts that the S&P 500 will rise to 2,150 by mid-year before fading to 2,100 by the end of 2015.

Not only will dividends supply all the market's upside, but companies that pay the most are poised to bounce back in 2015's second half, analysts led by David Kostin wrote. Stocks with the biggest payouts from utilities to real-estate investment trusts have trailed the S&P 500 since January as higher bond yields lured investors.

S&P 500 stock values "have limited scope for further upward expansion," a group of Goldman Sachs analysts including Mr. Kostin, the firm's chief U.S. equity strategist, wrote in a May 15 client note. "Dividend yield will be the sole contributor to total return during the next 12 months," they said.

Goldman's year-end projection for the S&P 500 would mark a 1.3-per-cent decline from Tuesday's closing level. The benchmark gauge for American equity fell 0.2 per cent to 2,123.90 at 9:39 a.m. in New York.

Speculation that stocks with the highest payouts will bounce back is visible in the options market. The ratio of puts to calls on the iShares Select Dividend ETF, which tracks a group of 100 high-yielding companies, is 0.21. The measure slipped to 0.2 on April 22, the lowest in three years.

Goldman isn't predicting a return to the first half of the 20th century, when the emphasis on dividends was greater than today. The firm predicted that the payouts will make up 46 per cent of the market's total return over the next decade, in line with the 25-year average.

A basket maintained by Goldman Sachs containing 50 stocks seen as offering high yields and a possibility of a dividend hike has soared 242 per cent since the start of the ongoing six- year bull market. The S&P 500 has increased 215 per cent over the same period. The Goldman gauge has added 3.2 per cent so far in 2015, while the equity benchmark is up 3.4 per cent.

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