With 2021 rolling along and the first quarter almost over, many investors are resetting for what could be a more volatile rest of the year, as interest rates and inflation concerns are becoming a very real potential threat. While the volatile rally of the past six weeks has been positive, it makes sense for investors to find the best possible stock ideas from the top analysts and firms.
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One of Wall Street’s most respected lists of domestic stocks is the Goldman Sachs America’s Conviction List. These are the firm’s top picks for high net worth and institutional accounts, and they are spread across 10 sectors. We screened the list, looking for the stocks that had the largest dividends and solid upside to the Goldman Sachs assigned target prices. We found these five, which growth and income investors may want to add to their portfolios now.

It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Bristol-Myers Squibb

This remains a solid pharmaceutical stock to own long term and offers among the best values now for investors. Bristol-Myers Squibb Co. (NYSE: BMY) is a global pharmaceutical company focused on discovering, developing, licensing and marketing chemically synthesized drugs or small molecules and biologics in various therapeutic areas, including virology comprising human immunodeficiency virus infection (HIV), oncology, neuroscience, immunoscience and cardiovascular.

The company’s products include the following:

• Opdivo for anti-cancer indications
• Eliquis, an oral inhibitor targeted at stroke prevention in adult patients with non-valvular atrial fibrillation, and the prevention and treatment of venous thromboembolic disorders
• Orencia for adult patients with active RA and prostate-specific antigen, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis.

Shareholders receive a very reliable 3.09% dividend. The Goldman Sachs team has their price target set at $86, while the Wall Street consensus target is just $75.13. Bristol-Myers stock closed trading on Monday at $63.38 per share.

This stock remains a top financial pick across Wall Street and is a solid idea in a rising rate environment. Citizens Financial Group Inc. (NYSE: CFG) operates approximately 2,700 ATMs and 1,000 branches in 11 states in the New England, Mid-Atlantic and Midwest regions, as well as through online, telephone and mobile banking services, and it maintains approximately 130 retail and commercial non-branch offices.
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The company operates in two segments. The Consumer Banking segment offers traditional banking products and services, including checking and savings accounts, home and education loans, credit cards, business loans, mortgage and home equity lending and unsecured product finance and personal loans, as well as wealth management and investment services to retail customers and small businesses. This segment also provides indirect auto finance for new and used vehicles through auto dealerships.

The Commercial Banking segment offers various financial products and solutions, such as loans and leasing, trade finance, deposit and treasury management, cash management, and foreign exchange and interest rate risk management solutions. It also provides loan syndications, corporate finance, merger and acquisition, and debt and equity capital markets capabilities.

Shareholders receive a solid 3.59% dividend. The Goldman Sachs price target of $54 is well above the consensus target of $45.89. Citizens Financial stock closed at $43.44 a share on Monday.

Marathon Petroleum

This is a solid way for more conservative investors to play oil price increases, and it is a top energy idea on the conviction list. Marathon Petroleum Corp. (NYSE: MPC) is one of the largest independent petroleum refining and marketing companies in the United States.

Until just recently, the company operated approximately 2,750 retail sites under the Marathon and Speedway brands. In addition, it operates a logistics network of pipelines, barges, trucks and terminals that store and transport crude and products.

Last year, the company announced it would sell Speedway to 7-11 in an all-cash deal valued at $21 billion, or $16.5 billion after-tax. The sale transforms the company’s balance sheet and creates options to revisit the corporate structure of MPLX. Many on Wall Street feel that with Speedway removed, the dislocation in refining value becomes even more transparent as the company trades much cheaper than its industry peers do. The deal is expected to close very soon.

Shareholders receive a robust 4.35% dividend. The $65 Goldman Sachs price target compares with a $46.27 posted consensus target price. Marathon Petroleum closed most recently at $53.35 per share.

This top consumer staples stock fits the bill for worried investors. PepsiCo Inc. (NYSE: PEP) operates as a food and beverage company worldwide. Its Frito-Lay North America segment offers Lay’s and Ruffles potato chips; Doritos, Tostitos and Santitas tortilla chips; and Cheetos cheese-flavored snacks, branded dips and Fritos corn chips.
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The Quaker Foods North America segment provides Quaker oatmeal, grits, rice cakes, natural granola and oat squares, as well as the recently name changed Aunt Jemima mixes and syrups, and Quaker Chewy granola bars, Cap’n Crunch cereal, Life cereal and Rice-A-Roni side dishes.

Pepsi’s North America Beverages segment offers beverage concentrates, fountain syrups and finished goods under the Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, Tropicana Pure Premium, Sierra Mist and Mug brands, as well as ready-to-drink tea and coffee, and juices.

Investors in PepsiCo stock receive a dependable 2.97% dividend. The Goldman Sachs price target is $157. The consensus target was last seen at $152.09, and the shares popped almost 3% on Monday to close at $137.80 apiece.

Raytheon Technologies

This stock has rallied smartly off its 52-week low but still offers perhaps the best value in the defense and aerospace sector. Raytheon Technologies Corp. (NYSE: RTX) is an industry leader in defense, government electronics, space, information technology and technical services.

With a history of innovation spanning 97 years, Raytheon provides state-of-the-art electronics, mission systems integration, C5I products and services, sensing, effects and mission support for customers in more than 80 countries.

In 2019, United Technologies and Raytheon agreed to merge their businesses to create a new aerospace and defense powerhouse. The two companies received unanimous approval from their respective boards, and the merger is finally complete, with the new company now called Raytheon Technologies.

Shareholders receive a 2.47% dividend. Goldman Sachs has set a $93 price objective on the shares. The posted consensus estimate is $85.06, and Raytheon Technologies stock closed on Monday at $76.92 a share.

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These five top picks from Goldman Sachs Americas Conviction List all pay dividends that are much higher than the 30-year U.S. Treasury bond, which closed Monday with a 2.38% yield. While not guaranteed, they all probably offer more safety in a rising interest rate environment. All look poised for great total return potential and less potential volatility in a very overbought stock market.

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