Goldman Sachs Group (GS), with a yield of 2.1%, has joined our Growth & Income Portfolio with a Buy recommendation, notes Crista Huff, editor of the industry-leading advisory, Cabot Undervalued Stocks Advisor.
Goldman is a major international investment bank that’s embarked on a strong foray into consumer banking. The stock's 2020 P/E is 9.9 and Goldman has the best earnings growth projection, by far, of any major large-cap bank.
Their online bank, named Marcus, was launched in 2015. Marcus diversifies Goldman’s revenue base, potentially smoothing out the less predictable quarterly profit fluctuations associated with Goldman’s more traditional investment banking and trading divisions.
About a year ago, Goldman teamed up with Apple Inc. (AAPL) to offer consumers a virtual credit card. And the Financial Times recently said that Goldman is reportedly in advanced talks with Amazon (AMZN) to offer loans to small- and medium-sized U.S. businesses through Amazon’s website.
The company has a long-term practice of repurchasing their stock, and has retired 18% of their outstanding shares in the four years through December 2019.
Dividend increases can be random, and they sometimes occur more than once per year. The most recent increase in the quarterly payout, which took place in July 2019, was 56% higher than the prior year’s quarterly payout. Previous dividend increases were much smaller, though.
I’m currently giving GS a "Buy" recommendation, since the broader market is a bit unpredictable right now, However, if the stock either pulls back further during a market correction or breaks past $265 to new high territory, I will almost certainly change my recommendation to a "Strong Buy".