Goldman Sachs has compiled a list of 50 dividend-growth stocks that it favors, including Ford Motor (F) - Get Ford Motor Company Report, Morgan Stanley (MS) - Get Morgan Stanley Report, PepsiCo (PEP) - Get PepsiCo, Inc. Report and Simon Property Group (SPG) - Get Simon Property Group, Inc. Report.
Goldman chose the stocks for their above-average dividend yield and the fastest expected dividend increases, CNBC reports.
The bank predicts a dividend yield of 2.4% for Ford in 2022 and estimates its compound annualized dividend growth rate at 100% for 2021-23.
Those numbers are 2.8% and 21% for Morgan Stanley, 2.9% and 13% for Pepsi, and 3.5% and 11% for Simon.
Other stocks in the list include Tapestry (TPR) - Get Tapestry, Inc. Report, Devon Energy (DVN) - Get Devon Energy Corporation Report, Molson Coors (TAP.A) - Get Molson Coors Beverage Company Class A Report, Broadridge Financial (BR) - Get Broadridge Financial Solutions, Inc. Report, Texas Instruments (TXN) - Get Texas Instruments Incorporated Report and Pinnacle West Capital (PNW) - Get Pinnacle West Capital Corporation Report.
Goldman predicts a dividend yield of 2.6% for Tapestry in 2022 and estimates its compound annualized dividend growth rate at 55% for 2021-23.
For Devon, the numbers are 7.5% and 50%, for Molson 3.1% and 45%, for Broadridge 1.6% and 16%, for TI 2.5% and 12%, and for Pinnacle West, 5.3% and 7%.
Ford on Tuesday closed 0.3% higher at $18.01. It has jumped 56% in the past six months. The company last week reinstated its dividend.
Morningstar analyst David Whiston puts fair value for the Dearborn, Mich., car icon at $20.
“We feel our thesis that Ford is well on its way to fixing its profit problems remains in place,” he wrote last week.
“The dividend was suspended after first-quarter 2020 due to the pandemic, and over time we think it will return to its prepandemic level of 15 cents per share.”