Investors love dividend stocks because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.
Goldman Sachs provides advice, investing, and execution for institutions and individuals across public and private markets. At 24/7 Wall St., we have followed the company’s research for 15 years to bring our readers its top stock ideas and economic commentary. The firm’s recent call for four rate cuts by next summer certainly caught our attention.
The Goldman Sachs team believes that companies with a high percentage of floating rate debt should perform exceptionally well in a rate-cutting environment, alongside consumer discretionary stocks and information technology companies. They noted this in the recent report:
With the market pricing of Fed cuts now similar to our expectations, our rates strategists expect long-end bond yields to remain around these levels through 2026. Our economists expect real US economic growth to accelerate from the below-trend recent pace toward the trend in 2026. For Treasury yields to move substantially lower, the market would likely have to become more pessimistic about the outlook for economic growth, in which case the downside risk to earnings would outweigh the benefit of falling interest rates for stocks.
We screened the Goldman Sachs equity database looking for companies that should thrive in a rate-cutting environment, and five stocks that are all Buy-rated at Goldman Sachs fit the bill perfectly, and are among the leaders in the amount of floating-rate debt they have on their books. All make sense for growth and income investors seeking to capitalize on the decline in interest rates.
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 institutional and high-net-worth clients with the best ideas across the investment spectrum. It is likely to continue doing so for years.
AT&T
AT&T Inc. (NYSE: T | T Price Prediction) is the world’s fourth-largest telecommunications company, measured by revenue, and it has a solid dividend yield of 3.80%. The legacy telecom has been undergoing a lengthy restructuring while lowering its dividend. Seventeen analysts have given the stock a Buy rating, indicating comprehensive Wall Street support. AT&T provides a range of telecommunications, media, and technology services worldwide. Its Communications segment offers wireless voice and data communications services.
AT&T sells through its company-owned stores, agents, and third-party retail stores:
- Handsets
- Wireless data cards
- Wireless computing devices
- Carrying cases
- Hands-free devices
AT&T also provides:
- Data
- Voice
- Security
- Cloud solutions
- Outsourcing
- Managed and provided professional services
- Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers
Additionally, this segment provides residential customers with broadband fiber and legacy telephony voice communication services.
It markets its communications services and products under:
- AT&T
- Cricket
- AT&T Prepaid
- AT&T Fiber
The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.
Goldman Sachs has a price target of $32 for the stock.
Amgen
Amgen Inc. (NASDAQ: AMGN) discovers, develops, manufactures, and delivers human therapeutics worldwide. This biotech giant remains a top stock for investors to buy, offering a safer investment with a 3.36% dividend, to capitalize on the massive potential growth in biosimilars. It is up almost 10% in 2025. Amgen discovers, develops, manufactures, and delivers human therapeutics worldwide.
Amgen focuses on:
- Inflammation
- Oncology/hematology
- Bone health
- Cardiovascular disease
- Nephrology
- Neuroscience
The company’s products include:
- Enbrel to treat plaque psoriasis, rheumatoid arthritis, and psoriatic arthritis
- Neulasta reduces the chance of infection due to a low white blood cell count in patients with cancer
- Prolia to treat postmenopausal women with osteoporosis
- Xgeva for skeletal-related events prevention
- Otezla for the treatment of adult patients with plaque psoriasis, psoriatic arthritis, and oral ulcers associated with Behcet’s disease
- Aranesp to treat a lower-than-normal number of red blood cells and anemia
- Kyprolis to treat patients with relapsed or refractory multiple myeloma
- Repatha reduces the risks of myocardial infarction, stroke, and coronary revascularization
Goldman Sachs has a massive $405 target price, representing a substantial 41% upside from the current price.
Comcast
This American multinational telecommunications and media conglomerate has a dividend yield of 4.05%. This top media and entertainment company remains a favorite among Wall Street investors. Comcast Corp. (NYSE: CMCSA) is a global media and technology company.
It operates through four segments:
- Residential Connectivity & Platforms
- Business Services Connectivity
- Media, Studios
- Theme Parks segments
The Residential Connectivity & Platforms segment offers residential broadband and wireless connectivity services, as well as residential and business video services, Sky-branded entertainment television networks, and advertising.
The Business Services Connectivity segment offers connectivity services for small business locations, including broadband, wireline voice, and wireless services. It also provides solutions for medium-sized customers, larger enterprises, and small businesses, as well as connectivity services in the United Kingdom.
The Media segment operates NBCUniversal’s television and streaming business, including:
- National and regional cable networks
- The NBC and Telemundo broadcast networks
- Owned local broadcast television stations
- Peacock, a direct-to-consumer streaming service
It also operates international television networks comprising the Sky Sports networks and other digital properties.
The Studios segment operates NBCUniversal and Sky film and television studio production and distribution operations.
The Theme Parks segment operates Universal theme parks in:
- Orlando, Florida
- Hollywood, California
- Osaka, Japan
- Beijing, China
The Goldman Sachs price target for the shares is $40.
Duke Energy
Duke Energy Corp. (NYSE: DUK) is an American electric power and natural gas holding company headquartered in Charlotte, North Carolina. It is located in a growing part of the country and pays a hefty 3.47% dividend. Duke Energy operates through two segments:
- Electric Utilities and Infrastructure (EU&I)
- Gas Utilities and Infrastructure (GU&I)
The EU&I segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest.
To develop electricity, Duke Energy uses the following:
- Coal
- Hydroelectric
- Natural gas
- Oil
- Solar and wind sources
- Renewables
- Nuclear fuel
This segment also sells electricity to municipalities, electric cooperative utilities, and load-serving entities.
The GU&I segment distributes natural gas to
- Residential
- Commercial
- Industrial
- Power generation natural gas customers
The segment also invests in pipeline transmission projects, renewable natural gas projects, and natural gas storage facilities.
Goldman Sachs’ price target is $138, almost 14% above the current trading level.
Merck
Merck & Co. Inc. (NYSE: MRK) develops and produces medicines, vaccines, biological therapies, and animal health products. Merck is not just a healthcare company but a global force in the industry. It is a no-brainer, down over 30% in the past year while paying a solid 3.90% dividend. The company operates through two segments.
The Pharmaceutical segment offers human health pharmaceutical products in:
- Oncology
- Hospital acute care
- Immunology
- Neuroscience
- Virology
- Cardiovascular
- Diabetes
- Vaccine products, such as preventive pediatric, adolescent, and adult vaccines
The Animal Health segment discovers, develops, manufactures, and markets veterinary pharmaceuticals, vaccines, health management solutions and services, as well as digitally connected identification, traceability, and monitoring products.
Merck serves:
- Drug wholesalers
- Retailers
- Hospitals
- Government agencies
- Managed healthcare providers, such as health maintenance organizations
- Pharmacy benefit managers and other institutions
- Physicians
- Physician distributors
- Veterinarians
- Animal producers
Merck’s growth is a result of its efforts and strategic collaborations. The company works with AstraZeneca, Bayer, Eisai, Ridgeback Biotherapeutics, and Gilead Sciences to jointly develop and commercialize long-acting treatments for HIV, demonstrating a commitment to innovation and growth.
Goldman Sachs’ price objective is $94.
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