Goldman Sachs likes these 3 top dividend stocks yielding as high as 7.6% — in a manic market, locking down a growing income stream makes sense

*Sign up for our MoneyWise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.

Gilead Sciences

Gilead Sciences is already one of the more generous dividend-payers from the healthcare sector, currently offering an annual dividend yield of 4.8%. But Goldman sees bigger payouts on the horizon.

The financial juggernaut predicts that by 2023, Gilead’s dividend per share divided by its current price will lead to a yield of 5%.

There’s good reason to be optimistic about this biopharmaceutical company. In Q1, Gilead’s revenue grew 3% year over year to $6.6 billion while adjusted earnings per share increased 4% to $2.12.

It also has a solid cash position of almost $7 billion as of Mar. 31.

Gilead started paying dividends in 2015 with a quarterly payout of 43 cents per share. Today, the company pays 73 cents per share — so the amount has grown by almost 70%.

More: Best investing apps

How you can invest in real estate without buying a home

Sponsored

Fundrise helps you invest in real estate without having to buy a house. Let their state-of-the-art technology and in-house experience open the door to new opportunities today.

Sign up

Best Buy (BBY)

The past few years haven’t been kind to brick-and-mortar stores. So who would have guessed that electronics retailer Best Buy — with more than 1,000 stores in the U.S. and Canada — would be able to deliver the dividend growth that it has of late?

In 2021, the company raised its quarterly dividend by 27% to 70 cents per share. Earlier this year, management announced another 26% quarterly payout increase to 88 cents per share.

While many retailers are still struggling, Best Buy has found its momentum. In the fiscal year ended Jan. 29, the company delivered record revenue and profitability, highlighted by 10.4% same-store sales growth.

The stock currently yields 4.1%. Goldman sees Best Buy continuing its dividend growth streak and offering a yield (based on the current price) of 4.3% in 2023.

More: Energy stocks

Devon Energy (DVN)

With oil and gas prices shooting through the roof, energy stocks have become some of the healthiest dividend payers in the market.

Devon Energy, for instance, recently hiked its quarterly payout by 27% to a record high of $1.27 per share, giving the stock a mouth-watering annual yield of 7.6%. The board also increased the company’s share repurchase authorization by 25% to $2 billion.

In Q1, Devon generated $1.3 billion of free cash flow for the quarter, marking an 18% increase year over year.

Goldman expects prosperity to persist for the oil and gas producer, projecting a dividend yield of 7.8% in 2023 based on the current stock price. That said, it’s important to note that Devon’s dividend consists of a fixed quarterly payout and a variable dividend that includes up to 50% of excess free cash flow.

Sign up for our MoneyWise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.

Get a piece of commercial real estate

Sponsored

While commercial real estate to has always been reserved for a few elite investors, outperforming the S&P 500 over a 25-year period, First National Realty Partners allows you to access institutional-quality commercial real estate investments — without the leg work of finding deals yourself.

Get started

More from MoneyWise

• Kevin O’Leary says ‘you’re actually losing money’ in a bank account — do this simple thing with your hard-earned cash instead
• Jim Rogers: Next bear market will be ‘worst in my lifetime’ — he'll rely on 3 assets
• Robert Kiyosaki says we're already in a 'technical depression' — he's using these 3 assets for protection