Goldman Sachs Sees 4 Rate Cuts by Next Summer: 5 High-Yield Dividend Winners

"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."

"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."

Dividend stocks offer significant income streams and substantial total return potential, where total return combines interest, capital gains, dividends, and distributions with stock appreciation. Goldman Sachs projects four Federal Reserve rate cuts by next summer and expects long-end bond yields to remain near current levels through 2026. The firm anticipates real U.S. economic growth accelerating toward trend in 2026. Companies with high percentages of floating-rate debt, along with consumer discretionary and information technology firms, should perform well in a rate-cutting environment. Five Goldman Sachs Buy-rated stocks with large floating-rate debt positions align with opportunities for growth and income investors.

Read at 24/7 Wall St.