Founded in 1869, Goldman Sachs is the world’s second-largest investment bank by revenue and is ranked 55th on the Fortune 500 list of the largest United States 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 and the safest profiles.
Five current picks are ideal for investors concerned about the potential for a “drawdown” over the next one to two years, which seems likely given the three-year bull market has driven the stock market to record highs, with the Dow Jones Industrial Average closing above 47,000 and the S&P 500 surpassing 6,800. Analysts cited the cooler-than-expected inflation data and optimistic corporate earnings as factors supporting the continued melt-up. The positive news heightened expectations that the Federal Reserve may continue cutting interest rates.
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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. While the firm states it’s not yet time to worry about a tech bubble, it’s likely high time to prepare for one. They said this recently.
There are elements of investor behavior and market pricing currently that resemble previous bubbles, including the rise in absolute valuations, high market concentration, increased capital intensity among leading companies, and the emergence of vendor financing. However, we see key differences: First, the appreciation of the technology sector has, so far, been driven by fundamental growth rather than irrational speculation about future growth. Second, the leading companies with the strongest returns have robust balance sheets. Third, the AI space has, so far, been dominated by a few incumbents; most bubbles form during a period of intense competition as both investors and new entrants flood into the space.
This healthcare giant offers an excellent investment opportunity with a 1.87% dividend. Abbott Laboratories, Inc. (NYSE: ABT) 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.
The Diagnostic Products segment is engaged 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.
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 $157 target price, representing a 17% gain.
AT&T is the world’s fourth-largest telecommunications company, measured by revenue, with a solid dividend yield of 4.24%. The legacy telecommunications company 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 Inc. (NYSE: 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:
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 fiber broadband and legacy voice telephony 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 $32 price target for the stock.
While Warren Buffett has trimmed his position over the last two years, this quality financial giant is an exceptional long-term holding with a solid 2.07% dividend. Bank of America Corporation (NYSE: BAC) is a bank holding company and financial holding company that reported strong Q3 results. Earnings per share of $1.06 vs. $0.95, as revenue of $28.24 billion vs. $27.5 billion beat analysts’ estimates. Profit rose 23% from a year earlier to $8.5 billion, and revenue grew 11% year-over-year, with EPS jumping 31%
Its segments include:
Consumer Banking segment offers a range of credit, banking, and investment products and services to consumers and small businesses.
The GWIM comprises two businesses: Merrill Wealth Management, which offers tailored solutions to meet clients’ needs through a comprehensive suite of investment management, brokerage, banking, and retirement products.
Bank of America Private Bank provides comprehensive wealth management solutions.
The Global Banking segment offers a range of lending-related products and services, including integrated working capital management and treasury solutions, as well as underwriting and advisory services.
The Global Markets segment offers sales and trading services, as well as research services, to institutional clients across fixed income, credit, currency, commodity, and equity markets.
Goldman Sachs has set a $56 target price.
Duke Energy 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 3.28% dividend. Duke Energy Corporation (NYSE: DUK) and its subsidiaries operate as energy companies in the United States.
It operates through two segments:
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
The segment also invests in pipeline transmission projects, renewable natural gas projects, and natural gas storage facilities.
Goldman Sachs’ price target for the company is posted at $138, almost 14% above the current trading level.
This is a way to play the energy sector on the services side, and the company pays shareholders a massive 5.05% dividend. Kodiak Gas Services, Inc. (NYSE: KGS) is a contract compression service provider in the United States, serving as a vital link in the infrastructure that enables the production, transportation, and distribution of natural gas and oil.
The Company’s segments include Contract Services and Other Services.
The Contract Services segment comprises operating Company-owned and customer-owned compression, gas treating, and cooling infrastructure that enable the production, gathering, processing, and transportation of natural gas and oil.
The Other Services segment consists of a broad range of services to support the needs of its customers, including:
Station construction
Customer-owned compression maintenance and overhaul,
Freight and crane charges
Parts sales
Ancillary time and material-based offerings
Kodiak Gas Services offers its services to:
Oil and gas producers
Midstream customers in high-volume gas gathering systems
Processing facilities
Multi-well gas lift applications
Natural gas transmission systems
Hitting the Goldman Sachs $43 target would be almost a 16% gain.
