Founded in 1869, Goldman Sachs is the world’s second-largest investment bank by revenue and ranks 55th on the Fortune 500 list of the largest U.S. corporations by total revenue. The Wall Street white-glove giant offers financing, advisory services, risk distribution, and hedging for the firm’s institutional and corporate clients. We review the firm’s Conviction List of top stock ideas monthly, seeking companies with the highest dividends, safe profiles, and the greatest upside relative to the firm’s target price objectives. With the year well underway, we decided to review the current list of high-yielding stocks that can provide secure, reliable passive income.
The Goldman Sachs Conviction List is a curated list of stocks that the firm’s research team believes are highly likely to outperform the market. It is a tool for investors to identify stocks with strong growth potential, frequently updated to reflect changes in market conditions and company performance. The list aims to identify stocks where Goldman Sachs analysts have the “highest level of conviction” in their outperformance. Five of the stocks we identified on this month’s list have significant upside relative to the assigned price target and come with reliable dividends.
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.
Abbott Laboratories
This healthcare giant offers an excellent investment opportunity with a 2.20% dividend. Abbott Laboratories Inc. (NYSE: ABT | ABT Price Prediction) is engaged in the discovery, development, manufacture, and sale of a broad and diversified line of health care products.
The company operates through four segments:
- Established Pharmaceutical Products
- Diagnostic Products
- Nutritional Products
- Medical Devices
The Established Pharmaceutical Products segment is engaged in the international sales of a broad line of branded generic pharmaceutical products, while the Diagnostic Products segment engages in the worldwide sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories, and alternate-care testing sites. The Nutritional Products segment is involved in the worldwide sales of a broad line of adult and pediatric nutritional products. And the Medical Devices segment includes the worldwide sales of:
- Rhythm management
- Electrophysiology
- Heart failure
- Vascular
- Structural heart
- Neuromodulation
- Diabetes care products
Goldman Sachs has a $140 target price, representing a 28% gain.
Bank of America
While Berkshire Hathaway has trimmed this position over the past two years, this quality financial giant remains an exceptional long-term holding with a solid 12.03% dividend yield. Bank of America Corp. (NYSE: BAC) is a bank holding company and financial holding company that reported impressive fourth-quarter results.
Its segments include:
- Consumer Banking, which offers a range of credit, banking, and investment products and services to consumers and small businesses.
- Global Wealth & Investment Management comprises two businesses. Merrill Wealth Management offers tailored solutions to meet client needs through a comprehensive suite of investment management, brokerage, banking, and retirement products. Bank of America Private Bank provides comprehensive wealth management solutions.
- Global Banking offers a range of lending-related products and services, including integrated working capital management and treasury solutions, as well as underwriting and advisory services.
- Global Markets offers sales and trading, as well as research, to institutional clients across fixed income, credit, currency, commodity, and equity markets.
Hitting the Goldman Sachs $67 target would be a solid 26% gain.
Dick’s Sporting Goods
This is one of the leading retailers in the sporting goods industry, which pays a dependable 2.35% dividend. Dick’s Sporting Goods Inc. (NYSE: DKS) is an omnichannel sporting goods retailer.
The company owns and operates Golf Galaxy, Public Lands, and Going Going Gone! specialty concept stores, and also offers its products online and through its mobile applications. It also owns and operates Dick’s House of Sport and Golf Galaxy Performance Center, as well as GameChanger, a mobile youth sports platform for livestreaming, scheduling, communication, and scorekeeping.
The company operates more than 3,200 stores, e-commerce, and digital businesses across 20 countries in North America, Europe, Asia, and Australia. It maintains a licensed store presence in Europe, the Middle East, and Asia.
It carries a wide variety of national brands, including Adidas, Asics, Brooks, Callaway Golf, Carhartt, Columbia, Hoka, Jordan, New Balance, Nike, Peloton, The North Face, Under Armour, Wilson, Yeti, and others. And it owns and operates brands such as Foot Locker, Kids Foot Locker, Champs Sports, WSS, and atmos.
The Goldman Sachs target price of $285 would be a 41% gain.
Golar LNG
This is a new addition to the Goldman Sachs Conviction List, and it offers a 2.43% dividend and significant upside to the target price. Golar LNG Ltd. (NASDAQ: GLNG) designs, owns, and operates marine infrastructure for the liquefaction of natural gas and the regasification, storage, and offloading of liquefied natural gas (LNG). Its fleet comprises two floating liquefied natural gas vessels (FLNGs).
The company’s segments include:
- FLNG
- Shipping
- Corporate and Other
The FLNG segment covers operations of FLNG vessels and projects. It converts LNG carriers into FLNG vessels, builds new ones, and contracts them to customers. This segment includes vessels such as FLNG Hilli, FLNG Gimi, and MKII FLNG. The Shipping segment focuses on the transportation operations of LNG carriers.
The Corporate and Other segment includes administrative tasks, ship operations, and maintenance services. It also provides FLNG commercial, operational, and technical support; crew management services and supervision; and corporate secretarial, accounting, and treasury services.
Golar LNG operates in:
- Bermuda
- United Kingdom
- Norway
- Cameroon
- Croatia
Goldman Sachs has set a $54 target price, representing a 38% gain.
Kontoor Brands
While somewhat off the radar, this company has tremendous upside and well-known brands, and it pays a reasonable 3.48% dividend. Kontoor Brands Inc. (NYSE: KTB) is a global lifestyle apparel company that designs, manufactures, procures, sells, and licenses apparel, footwear, and accessories under brands Wrangler, Lee, and Helly Hansen.
The Wrangler brand offers multiple sub-brands, collections, and product lines within the Wrangler brand to target specific consumer demographics and consumer end-users, including:
- 20X
- Aura from the Women at Wrangler
- Cowboy Cut
- Premium Patch
- Riggs Workwear
- Rock 47
- Rustler
- Wrangler Retro
- Wrangler Rugged Wear
- Wrangler All Terrain Gear
The Lee segment offers denim, apparel, footwear, and accessories for adults and children. The brand offers multiple sub-brands, collections, and product lines, including:
- Lee101
- Riders
- Storm Rider
- Lee MVP
- Lee X
The Helly Hansen brand is an outdoor and workwear brand. It offers sub-brands, including Helly Hansen Sport and Helly Hansen Workwear.
The Goldman Sachs price target of $84 would be a 40% gain for shareholders.
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