With interest rates falling, Goldman Sachs advises clients to look for high-dividend stocks, which are trading at their cheapest levels in almost 40 years relative to stocks with low yields, wrote Goldman's chief U.S. equity strategist, David Kostin in a note.
“With the 10-year Treasury yield at just 1.5% and the Fed likely to cut two more times this year, investors should look for opportunities in dividend stocks,” he wrote.
S&P 500 dividends have increased by 9% in H1 this year; Goldman sees S&P 500 annualized dividend growth of 3.5% during the next 10 years.
Among stocks in Goldman's dividend growth basket and their 2019 dividend yields: AT&T (T +0.8%) at 5.9%; Kohl's (KSS +4.8%) at 6.1%; AbbVie (ABBV +2.8%) at 6.8%; Seagate Technology (STX +1.7%) at 5.7%; and Simon Property Group (SPG +1.2%) at 5.6%.
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