Goldman Sachs’ 5 Cheap Dividend Stocks

In this article, we will discuss Goldman Sachs’ 5 cheap dividend stocks. If you want to read our detailed analysis of dividend investing and the firm’s outlook on dividend stocks, go directly to read Goldman Sachs’ Cheap Dividend Stocks. 

5. Franklin Resources, Inc. (NYSE:BEN)

Dividend Yield as of November 4: 5.00%

Franklin Resources, Inc. (NYSE:BEN) is an American multinational holding company and is one of the world’s largest investment managers. In fiscal Q4 2022, the company reported revenue of $1.94 billion, which beat consensus by $170 million. It ended the fiscal year with cash and investments worth over $6.8 billion after funding two acquisitions and other investments. Moreover, it also paid $773 million to shareholders in dividends and share repurchases.

Franklin Resources, Inc. (NYSE:BEN) currently pays a quarterly dividend of $0.29 per share and has a dividend yield of 5.00%, as of November 4. The company is one of the best dividend stocks to buy as it has been raising its payouts consistently for the past 42 years. Moreover, it has raised its dividends at a CAGR of 7.71% in the last five years. Goldman Sachs forecasts an 8% dividend growth over the next two years.

In October, Credit Suisse initiated its coverage of Franklin Resources, Inc. (NYSE:BEN) with a Neutral rating, highlighting the company’s focus on faster growth across its different segments.

At the end of Q2 2022, 24 hedge funds in Insider Monkey’s database owned investments in Franklin Resources, Inc. (NYSE:BEN), with a total value of over $217.2 million. Among these hedge funds, AQR Capital Management was the company’s leading stakeholder in Q2.

4. Best Buy Co., Inc. (NYSE:BBY)

Dividend Yield as of November 4: 5.15%

Best Buy Co., Inc. (NYSE:BBY) is an American multinational consumer electronics retail company based in Minnesota. Evercore ISI maintained an In-Line rating on the stock in October with a $70 price target, calling the company one of the most well-managed names in the sector. However, the firm expressed concerns regarding the company’s margins in FY22.

On August 31, Best Buy Co., Inc. (NYSE:BBY) declared a quarterly dividend of $0.88 per share, in line with its previous dividend. The company has been raising its dividends consistently for the past nine years, coming through as one of the best dividend stocks. As of November 4, the stock has a dividend yield of 5.15%. According to Goldman Sachs, the company’s dividend will grow by 17% by 2024.

According to Insider Monkey’s data, 26 hedge funds owned stakes in Best Buy Co., Inc. (NYSE:BBY) in Q2 2022, up from 25 in the previous quarter. The consolidated value of these stakes is over $406.8 million, compared with $251.4 million worth of stakes owned by hedge funds in the preceding quarter.

3. Intel Corporation (NASDAQ:INTC)

Dividend Yield as of November 4: 5.24%

Intel Corporation (NASDAQ:INTC) is a California-based multinational semiconductor company that also deals in cloud computing and data centers. According to Goldman Sachs, the company would be able to grow its dividends by 5.3% in the next two years. It currently pays a quarterly dividend of $0.365 per share for a dividend yield of 5.24%. Intel Corporation (NASDAQ:INTC) has been raising its dividends consistently for the past seven years and has paid dividends for 28 years in a row, which makes it one of the best dividend stocks on our list.

In Q3 2022, Intel Corporation (NASDAQ:INTC) reported revenue of $15.3 billion, which fell in line with Street estimates. For the next quarter, the company expects its revenue to fall between $14 billion to $15 billion versus a consensus of $16.43 billion.

In October, Baird maintained a Neutral rating on Intel Corporation (NASDAQ:INTC) with a $34 price target, appreciating the company’s magnitude for restructuring.

At the end of Q2 2022, 65 hedge funds in Insider Monkey’s database owned stakes in Intel Corporation (NASDAQ:INTC), compared with 76 in the previous quarter. These stakes have a consolidated value of over $2.5 billion. Ken Griffin and Cliff Asness were some of the company’s leading stakeholders in Q2.

2. Verizon Communications Inc. (NYSE:VZ)

Dividend Yield as of November 4: 7.04%

Verizon Communications Inc. (NYSE:VZ) is a New York-based multinational telecommunications company that mainly provides wireless and broadband services to its consumers.

In Q3 2022, Verizon Communications Inc. (NYSE:VZ) recorded a fifth consecutive quarter of over 150,000 postpaid phone net additions. The company’s year-to-date operating cash flow came in at $28.2 billion and its free cash flow for the period stood at $12.4 billion.

Verizon Communications Inc. (NYSE:VZ) has been raising its dividend for the past 16 years due to strong cash flows. The company pays a quarterly dividend of $0.6525 per share for a dividend yield of 7.04%, as recorded on November 4. Goldman Sachs projects a 2% dividend growth for the company by 2024.

In October, Morgan Stanley maintained an Equal Weight rating on Verizon Communications Inc. (NYSE:VZ) with a $41 price target, highlighting the company’s postpaid phone sales.

Of the 895 elite funds tracked by Insider Monkey, 58 hedge funds had investments in Verizon Communications Inc. (NYSE:VZ) in Q2 2022, compared with 69 in the previous quarter. These investments are collectively valued at nearly $2.3 billion.

Mawer Investment Management mentioned Verizon Communications Inc. (NYSE:VZ) in its Q3 2022 investor letter. Here is what the firm has to say:

“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged the broader market as their worlds are increasingly colliding. Companies such as Verizon (NYSE:VZ) has been impacted as wireless operator is spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”

1. Devon Energy Corporation (NYSE:DVN)

Dividend Yield as of November 4: 7.28%

Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based energy company that is involved in the exploration of hydrocarbons. The company has been making uninterrupted dividend payments to its shareholders for the past 29 years, coming through as one of the best dividend stocks to buy. It currently offers a quarterly dividend of $1.35 per share and has a dividend yield of 7.28%, as of November 4. According to Goldman Sachs, the company’s dividends are expected to grow by 4% by 2024.

In the third quarter of 2022, Devon Energy Corporation (NYSE:DVN) reported revenue of $5.43 billion, which showed a 56.5% growth from the same period last year. Its operating cash flow for the quarter amounted to $2.1 billion, up 32% from the same period last year. The company also generated $1.5 billion in free cash flow during the quarter.

In October, Citigroup raised its price target on Devon Energy Corporation (NYSE:DVN) to $80 and kept a Buy rating on the shares due to the company’s solid results this year.

As of the close of Q2 2022, 57 hedge funds tracked by Insider Monkey owned stakes in Devon Energy Corporation (NYSE:DVN), compared with 66 in the previous quarter. These stakes are collectively valued at $1.48 billion. With roughly 15 million DVN shares, GQG Partners was the company’s leading stakeholder in Q2.

GoodHaven Capital Management mentioned Devon Energy Corporation (NYSE:DVN) in its Q2 2022 investor letter. Here is what the firm has to say:

“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”

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