Goldman Sachs Also Picks... Stocks Strongly Recommended Amid Trump Fears

Goldman Sachs Selects 7 Excellent Dividend Stocks

"Prepare for Market Waves with High Dividend Stocks"

Interest in high dividend stocks is increasing in the U.S. stock market. The market volatility has increased due to the tariff war between the U.S. and China. Global investment banks (IBs) are advising to prepare for market waves with high dividend stocks in sectors such as food and beverage, utilities, and finance.

According to CNBC on the 27th, Goldman Sachs recently selected 7 excellent dividend stocks. They set three conditions among their research coverage (analyzed stocks): △Dividend yield of 2.5% or more per annum △Average annual dividend growth rate of 5% or more over the past three years △A value of 5% or more when dividing free cash flow by earnings per share over the past three years. Goldman Sachs emphasized, "To protect investor portfolios, conditions beyond dividend yield are needed," and "It is necessary to consider performance forecasts and future dividend payment conditions."

Eversource Energy had the highest dividend yield (5.2%) among the 7 stocks. This figure far exceeds the average (1.45%) of companies included in the S&P 500 index. This company is a utility company listed on the New York Stock Exchange. Its main businesses are electricity, water, and natural gas supply. It is not much affected by the economy. This is the background that allowed it to increase dividends for 26 consecutive years. The stock price rose 7.89% from the 9th to this day. PepsiCo (3.8%) and Citigroup (3.4%) followed.

PepsiCo is a food and beverage company famous for 'Pepsi', 'Gatorade', and 'Doritos'. In February, PepsiCo increased its annual dividend by 5%. It has increased for 53 consecutive times. Despite the tariff war, it is expected that profitability will be maintained due to the nature of the business. Citigroup posted a revenue of $21.6 billion (about 31 trillion won) in the first quarter of this year. With active trading of stocks and bonds, it recorded an 'earnings surprise'. Mike Mayo, a Wells Fargo analyst, evaluated, "Citigroup recorded another 'flawless performance'." Utility company Xcel Energy (3.2%) and human resources consulting firm Korn Ferry (3.1%) were also selected as excellent dividend companies.

The dividend yield ranking of S&P 500 included companies is also drawing attention again. According to the U.S. investment media Barron's, the dividend yield of the chemical company Dow was 9.41%, ranking first among S&P 500 companies. The reason for the high figure is that the stock price has fallen 25.84% this year due to deteriorating business conditions. The dividend yield is the value obtained by dividing the annual dividend per share by the stock price. The lower the stock price, the higher it becomes.

However, recently, Dow CEO Jim Fitterling confidently stated, "We have the ability to pay the best dividends in the industry," and the company is presenting a positive outlook. Along with Dow, global pharmaceutical company Pfizer (7.55%) and asset management company Invesco (5.97%), known for developing exchange-traded fund (ETF) products, are evaluated as companies with both strong fundamentals and dividend capacity. Invesco recently announced in its first-quarter earnings report that its assets under management (AUM) increased by 11% compared to the previous year. Recently, it also decided to purchase $1 billion (about 1.43 trillion won) of preferred stock. Pfizer's CFO David Denton emphasized, "We will reduce debt and further increase dividends by the end of this year."

Reporter: Si-eun Lee