2020 is turning out already to be a volatile year with the coronavirus catching investors off guard , sending major stock averages on a roller coaster ride and bond yields diving. Goldman Sachs has a portfolio of dividend stocks for investors who want a smoother ride and it's topping the market as well.
The bank is touting to clients a portfolio that tracks stocks with high dividend growth. It is doubling the S&P 500's returns so far this year and is the best performing basket among the 46 portfolios Goldman created exclusively for its clients.
This winning basket consists of 50 stocks with above average dividend yield and the fastest expected dividend growth, according to the bank's note to clients explaining the portfolios' constructions.
These stocks will raise their dividends by an annualized rate of 9% through 2021, compared to the S&P 500's median dividend growth rate of 5%, Goldman analysts estimate. The basket pays a dividend of 3.5%, versus the S&P 500's 1.9% and much higher than the current 10-year yield of about 1.6%. The portfolio has returned 6% so far in 2020, beating the S&P 500's 3% gain.