Investing

Dividend Lovers Betting Big on 6 Goldman Sachs Top Conviction List Picks for 2024

Lee Jackson

Published: December 9, 2023 9:12 am

This year’s Artificial Intelligence rally led by the so-called “Magnificent 7” has been fantastic if you owned those stocks. The reality is the great bulk of the S&P 500 is treading water for the most part and is not likely to catch up to the hype-driven AI and technology stocks any time soon.

One thing is for sure: with looming storm clouds on the horizon and the potential for at least one more interest rate increase, many strategists on Wall Street feel we will be fortunate to have high single-digit gains for the balance of 2023, and we could very well have a 20% or more significant sell-off in 2024 added to the mix at some juncture.

We screened the Goldman Sachs Conviction List of top stock picks looking for dividend-paying blue chips that growth and income investors can look at now. Six top companies hit our screens, all of which are rated Buy.

Chevron

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This integrated giant is safer for investors looking to get positioned in the energy sector, has backed up some, and now yields a strong 4.17% dividend. Chevron Corporation (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries.

The company operates in two segments:

• Upstream
• Downstream.

The Upstream segment is involved in the exploration, development, production, and transportation of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as operates a gas-to-liquids plant.

The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil, refined products, and lubricants; manufacturing and marketing renewable fuels; transporting crude oil and advanced products by pipeline, marine vessel, motor equipment, and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives.

Chevron is also involved in cash management, debt financing, insurance operations, real estate, and technology businesses.

Jefferies Financial

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This broker-dealer is also a Warren Buffett holding and is an excellent idea for those looking for financials besides money center banks. The company pays a 3.42% dividend. Jefferies Financial Group, Inc. (NYSE: JEF) engages in investment banking capital markets and asset management businesses in the Americas, Europe, the Middle East, Africa, and Asia.

The company operates in

• Investment Banking and Capital Markets
• Asset Management,
• Merchant Banking,
• Corporate segments. It provides investment banking, advisory services concerning mergers or acquisitions, restructurings or recapitalizations, private capital advisory transactions, equity and debt underwriting, and corporate lending.

In addition, Jefferies offers:

• Financing,
• Securities lending and other prime brokerage services
• Equities research and finance
• Wealth management services.

Further, it provides clients with sales and trading of investment-grade corporate bonds:

• U.S. and European government and agency securities
• Municipal bonds
• Mortgage-backed and asset-backed securities
• Leveraged loans,
• Consumer loans,
• High yield and distressed securities,
• Emerging markets debt,
• Interest rate and credit derivative products
• Foreign exchange trade execution and securitization.

Merck

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This company remains a leading healthcare stock for conservative investors, paying a dependable 2.87% dividend. Merck & Co. Inc. (NYSE: MRK) is a global healthcare company.

Merck operates through two segments:

• Pharmaceutical
• Animal Health

The Pharmaceutical segment offers human health pharmaceutical products in oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes, as well as vaccine products, such as preventive pediatric, adolescent, and adult vaccines.

The Animal Health segment discovers, develops, manufactures, and markets veterinary pharmaceuticals, vaccines, and health management solutions and services, as well as digitally connected identification, traceability, and monitoring products.

Merck serves drug wholesalers,

• Retailers,
• Hospitals
• Government agencies;
• Managed health care providers, such as health maintenance organizations
• Pharmacy benefit managers and other institutions

The company collaborates with AstraZeneca PLC (NYSE: AZN), Bayer AG; Eisai Co., Ltd., Ridgeback Biotherapeutics; and Gilead Sciences, Inc. (NASDAQ: GILD) to jointly develop and commercialize long-acting treatments in HIV.

Republic Services

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Despite the economy’s ups and downs, somebody has to pick up the trash and recyclables, and this company also pays a 1.33% dividend. Republic Services Inc. (NYSE: RSG) and its subsidiaries offer environmental services in the United States.

The company provides collection and processing of recyclable materials, collection, transfer, and disposal of non-hazardous solid waste, and other environmental solutions.

The company’s collection services include

• Curbside collection of material for transport to transfer stations, landfills, or recycling processing centers
• Supply of recycling and waste containers
• Renting of compactors.

Republic Services also offers disposal of non-hazardous solid and liquid material and in-plant services, such as transportation and logistics. It serves small-container, large-container, and residential customers.

As of December 31, 2022, the company operated through:

• 353 collection operations,
• 233 transfer stations,
• 206 active landfills,
• 71 recycling processing centers,
• Six saltwater disposal wells
• Seven deep injection wells
• Three treatment, recovery, and disposal facilities in 41 states.

Simon Property Group

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This leading company has been pounded and offered the best entry point since last year, offering patient investors a massive 6.58% dividend. Simon Property Group Inc. (NYSE: SPG) invests in the global real estate markets.

Simon Property Group invests, owns, manages, and develops properties.

The company primarily invests in

• Regional malls,
• Premium outlets,
• Mills
• Community/lifestyle centers

Through its subsidiary partnership, it owns or has an interest in about 230 properties in the US and Asia. The company also has a 28.9% interest in Klepierre, a European REIT with over 260 shopping centers in 13 countries.

Southern Company

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This large-cap utility leader makes sense for conservative accounts and pays a rich 4% dividend. The Southern Company (NYSE: SO), through its subsidiaries, engages in the generation, transmission, and distribution of electricity.

Southern Company operates in four segments:

• Gas Distribution Operations
• Gas Pipeline Investments
• Wholesale Gas Services
• Gas Marketing Services

The company also constructs, acquires, owns, and manages power generation assets, including renewable energy and battery energy storage projects, and sells electricity in the wholesale market; and distributes natural gas in

• Illinois,
• Georgia,
• Virginia, and
• Tennessee

Southern Company also owns and operates

• 30 hydroelectric generating stations,
• 24 fossil fuel generating stations,
• three nuclear-generating stations,
• 13 combined cycle/cogeneration stations,
• 44 solar facilities,
• 13 wind facilities,
• One fuel cell facility
• One battery storage facility
• Constructs, operates and maintains 75,924 miles of natural gas pipelines and 14 storage facilities with a total capacity of 157 billion cubic feet to provide natural gas to residential, commercial, and industrial customers.