Investing

5 Top Goldman Sachs Conviction List Stocks to Buy Pay Big, Safe Dividends

For the past two weeks, the sellers have been holding serve and investors are growing increasingly more worried about a big sell-off ahead. Given the massive move since the market lows of March 2020, and the fact that we haven’t had a 5% decline in almost a year, many investors sense that it is time to move to safer stocks that still have growth potential going forward but also pay solid dividends that are dependable. Despite some hand wringing over higher interest rates, those rates remain near generational lows across the board, and it is unlikely the Federal Reserve starts to increase rates for another year or more.

We decided to screen the Goldman Sachs Americas Conviction List, which is a collection of the top equity ideas at the firm, looking for stocks that paid a solid and dependable dividend that was higher than the S&P 500 yield of 1.31% and the 30-year U.S. Treasury bond of 1.91%.

We found five that look like outstanding total return ideas now, and all are positioned well for the rest of 2021 and beyond. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Bank of America

The company posted solid second-quarter results and looks poised to do the same for the third quarter. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, corporations and governments in the United States and internationally. It operates 5,100 banking centers, 16,300 ATMs, call centers and online and mobile banking platforms.

The bank has expanded into a number of new U.S. markets, with scale across the country positioning it ideally to benefit from accelerating loan growth over the next two years. Moreover, unlike smaller peers, scale allows the bank to increase investment substantially over the next few years without notably jeopardizing returns, driving further market share gains.

Bank of America stock investors receive a 2.07% dividend. Goldman Sachs has a $44 price target on the shares, which is in line with the $44.01 consensus target. Friday’s closing share price was $40.50.