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• Goldman Sachs has Buy ratings on five top Warren Buffett dividend stocks.
• Companies that pay dependable dividends can add to total return.
• Grab this free report now: Access 2 legendary, high-yield dividend stocks Wall Street loves.

The artificial intelligence rally over the past year and a half, led by the so-called Magnificent 7, has been remarkable if you owned those stocks. However, most of the S&P 500 is treading water and likely will not catch up to the hype-driven AI stocks soon.

One thing remains certain: with storm clouds gathering on the horizon and the risk of an escalating conflict in the Middle East, many Wall Street strategists are cautious, predicting modest single-digit gains for the remainder of 2024. However, a significant 20% or more sell-off could also be possible, potentially leading to a major market shift.

Our screening of Goldman Sachs’ list of Buy-rated dividend stocks found five top companies with solid total return potential and dependable dividends. These companies also present a solid opportunity for those seeking passive income. Moreover, all the stocks are also in Warren Buffet’s Berkshire Hathaway portfolio.

These stocksare among the world’s most prestigious investment banks’ best dividend ideas, and they are likely to attract the attention of savvy investors. All make sense for investors to add to their portfolios now. These five dividend stocks are not only top picks from Goldman Sachs but are also in Warren Buffett’s portfolio.

Why we recommend Goldman Sachs stocks

Goldman Sachs is the acknowledged leader in the investment landscape on Wall Street and worldwide. The firm’s top-notch research department continues to provide clients with the best ideas across the investing spectrum and is likely to continue for years.

Ally Financial

With no buildings, the bank posted solid first-quarter earnings and paid a significant 3.02% dividend. Ally Financial Inc. (NYSE: ALLY), a pioneer in the digital financial services industry, offers a diverse range of innovative digital financial products and services to consumer, commercial, and corporate customers, primarily in the United States and Canada.

It operates through four segments:

• Automotive Finance Operations
• Insurance Operations
• Mortgage Finance Operations
• Corporate Finance Operations

The Automotive Finance Operations segment offers:

• Automotive financing services, including retail installment sales contracts
• Loans and operating leases
• Term loans to dealers
• Financing dealer floor plans and other lines of credit to dealers
• Warehouse lines to automotive retailers
• Fleet financing.

It also provides financing services to companies and municipalities to purchase or lease vehicles and vehicle remarketing services.

The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, as well as commercial insurance products directly to dealers. This segment provides vehicle service and maintenance contracts and guaranteed asset protection products and underwrites commercial insurance coverages, which primarily insure dealers’ vehicle inventory.

The Mortgage Finance Operations segment manages a consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans from third parties and direct-to-consumer mortgage offerings.

The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies and leveraged loans and commercial real estate products to serve companies in the healthcare industry.

The company also offers commercial banking products and services, securities brokerage, and investment advisory services.

American Express

This stock has been strongand pays a 1.21% dividend. American Express Co. (NYSE: AXP) provides charge and credit payment card products and travel-related services worldwide.

The company operates through three segments:

• Global Consumer Services Group
• Global Commercial Services
• Global Merchant and Network Services

Its products and services include:

• Payment and financing products
• Network services
• Accounts payable expense management products and services
• Travel and lifestyle services

The company’s products and services also comprise:

• Merchant acquisition and processing
• Servicing and settlement
• Point-of-sale marketing
• Information products and services for merchants
• Fraud prevention services and the design and operation of customer loyalty programs

Berkshire Hathaway owns 151,610,700 shares, which is 20.9 % of American Express’s float, and 8.7% of the portfolio.

Bank of America

The company posted strong first-quarter results and paid a solid 2.44% dividend. 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
• Operating 5,100 banking centers, 16,300 ATMs, call centers, and online and mobile banking platforms.

Bank of America has expanded into several new U.S. markets, and its global scale ideally positions it to benefit from accelerating loan growth over the next two years. Moreover, unlike smaller peers, scale allows the bank to substantially increase investment over the next few years without notably jeopardizing returns, driving further market share gains.

Warren Buffett owns 1,032 852,006 bank shares, 13% of the float, and 9.5% of Berkshire Hathaway’s portfolio.

Chevron

This integrated giantis a safer way for investors looking to get positioned in the energy sector, and it pays a rich 4.11% dividend. Chevron Corp. (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 following:

• 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
• Transportation, storage, and marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum product
• 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
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

Chevron announced in the fall that it has entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion.

Three lawsuits have been filed against Hess, charging inadequate disclosure over the sale, and Chevron has said arbitration over Hess’s Guyana assets could delay the closing timeline until October 2025. However, most Wall Street analysts feel the deal will ultimately be completed, and Chevron will emerge even more powerful in the energy sector.

Berkshire Hathaway owns 6.7% of Chevron’s outstanding stock with 123.000,000 shares, and the energy giant makes up 5.1% of the portfolio. Each year the stock generates $776,734,888 in dividend income.Want $4,000 in Passive Income? Invest $3,000 Each Into These 10 Dividend Stocks

Citigroup

This is a top bank that Buffett bought a massive $2.5 billion worth of stock back in the summer of 2022 that pays a dependable 3.44% dividend. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations, and governments with a broad range of financial products and services.

Citigroup offers:

• Consumer banking and credit
• Corporate and investment banking
• Securities brokerage
• Transaction services
• Wealth management services

Citi operates and does business in more than 160 countries/ jurisdictions in North America, Latin America, Asia, Europe/Middle East and Africa (EMEA).

Trading at a still cheap 9.5 times estimated 2024 earnings, this company looks very reasonable in a volatile stock market and a dramatically lagged sector.

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