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Goldman finds cheap stocks with strong and growing dividend yields for this market turmoil


Now that the market has fallen to its 2022 lows and bond yields have surged to their highest levels in years, traders preparing their portfolios for more volatility and uncertainty may want to turn to high dividend-yield stocks for good returns and stability. On Wednesday the yield on the 10-year U.S. Treasury yield rose above 4% for the first time since 2008. In the previous session, the S & P 500 reached a new bear market low of 3,623.29, indicating that stocks could still have further to fall. Investors wanting to counter the market turbulence with income can look to stocks with high dividend yield and growth. Goldman Sachs has a basket of cheap stocks, with a median dividend yield of 3.4%, compared to the S & P 500’s 1.8%. The firm also projects 11% dividend growth between 2021 and 2023 for the median stock, compared to 6% in the S & P. Here are 10 of the stocks in Goldman’s basket: Pioneer Natural Resources is one of just two energy stocks in the basket and has the highest dividend yield, 11.5%, and fastest projected growth, 108%, of the entire list. That’s followed closely by Ford Motor, which has a 3.4% dividend yield, and projected growth of 100%. Lumen Technologies, with a dividend yield of 8.9% but 0% projected growth, also has the biggest payout ratio of any stock on Goldman’s list, at 73%. The payout ratio shows how much of a company’s earnings are paid out as dividends. The payout ratio for most stocks on the list lands between 30% and 50%. Among financials, Morgan Stanley has the fastest projected dividend growth at 21%. Its dividend yield is 3.7%. Most of the tech stocks names have among the slowest pace of growth projected. That includes IBM and ADP, at 1% and 9%, respectively. NXP Semiconductors, however, is looking at 41% growth, according to Goldman Sachs. Its dividend yield sits at 2.2%. UPS and health stocks Abbvie and Organon are also on the list.

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