Updated 3/10/25
Goldman Sachs is one of the most recognized names in global finance. For over 150 years, the company has been a dominant force in investment banking, asset management, and institutional trading. While it’s widely known for its influence in capital markets, Goldman has also built a reputation for rewarding shareholders with dividends and buybacks.
For investors focused on income, GS offers an interesting blend of a reasonable yield, consistent dividend growth, and financial resilience. But is it the right fit for a long-term dividend portfolio? Let’s take a closer look.
Key Dividend Metrics
📈 Forward Dividend Yield: 2.14%
💰 Annual Dividend Payout: $12.00 per share
📅 Ex-Dividend Date: February 28, 2025
🔄 Dividend Growth Rate (5-Year Avg): 8.20% (estimated)
🛡️ Payout Ratio: 28.37% (low risk level)
🏦 5-Year Average Dividend Yield: 2.30%
Dividend Overview
Goldman Sachs currently yields 2.14%, which is competitive for a financial stock but not on the high end of the spectrum. While some banks offer a higher yield, GS provides a balance of income and capital appreciation.
One of the most encouraging signs for dividend investors is its payout ratio of just 28.37%. That means less than a third of its earnings go toward dividends, leaving plenty of room for future increases. This is the kind of flexibility that long-term investors like to see, as it signals that the company is prioritizing sustainability over unsustainable payouts.
The company recently paid its latest quarterly dividend of $3.00 per share on March 28, 2025, continuing its steady track record of shareholder returns.
Dividend Growth and Safety
Goldman Sachs isn’t just maintaining its dividend—it has been growing it consistently. Over the past five years, its dividend has increased at an estimated annual rate of 8.20%. While that’s not an aggressive growth rate, it’s a respectable pace for a financial powerhouse that also dedicates significant capital to share buybacks.
One of the strongest aspects of GS’s dividend is its safety. The low payout ratio means the company has significant room to increase distributions even during economic downturns. In addition, earnings growth has supported consistent dividend hikes, making it a reliable income stock.
A few key strengths in Goldman’s dividend safety stand out:
- The low payout ratio reduces risk
- Consistent earnings growth supports further dividend hikes
- Share repurchases help increase per-share value over time
Of course, nothing is without risk. Since Goldman Sachs operates in a highly cyclical industry, earnings could fluctuate in weaker economic conditions. However, the company has a strong track record of weathering downturns, making its dividend relatively secure even in challenging markets.
Chart Analysis
Price Action and Trend
Goldman Sachs (GS) has been on a strong upward trajectory for most of the past year, showing a well-established uptrend. The price remained above both the 50-day and 200-day simple moving averages (SMA) for an extended period, reinforcing bullish sentiment. However, recent price action shows a noticeable pullback, with the stock dropping from recent highs above $650 to its current level of $559.67.
The decline has brought the stock closer to its 50-day SMA, which was previously acting as a solid support level. The price is now testing this zone, and whether it holds or breaks below will be key in determining the stock’s next move. The 200-day SMA remains well below, suggesting the longer-term trend is still intact, but momentum has weakened in the short term.
Volume and Market Participation
Volume levels indicate shifting investor sentiment. Earlier in the trend, volume spikes accompanied breakouts, confirming buying interest. However, more recently, there has been an increase in red bars, showing heavier selling pressure.
The decline in price over the last few weeks has come with increasing volume, suggesting that the selling is not just profit-taking but rather a shift in sentiment. If volume remains high while the stock continues lower, it could indicate further downside pressure.
Relative Strength Index (RSI) and Momentum
The RSI indicator has steadily declined from overbought levels and is now approaching the oversold zone. This suggests that GS is losing momentum, and bearish pressure has taken control in the short term.
A reading near or below 30 would indicate the stock is oversold, which could trigger a short-term bounce. However, if RSI continues trending downward without any sign of stabilization, it could signal that sellers remain in control.
Moving Average Interaction
The recent break below the 50-day SMA could be a warning sign for the stock. In strong uptrends, this moving average typically acts as dynamic support. If GS fails to reclaim this level in the coming sessions, it could lead to a further test of the 200-day SMA.
A move toward the longer-term moving average would represent a deeper correction but could offer an opportunity for buyers looking for a lower entry point. If the 50-day SMA is reclaimed, it would suggest that the current pullback is just a temporary dip within the broader uptrend.
Analyst Ratings
📈 Upgrades:
🔹 Argus Research ➝ Upgraded from Hold to Buy on April 16, 2024, with a price target of $465. The firm highlighted Goldman Sachs’ strong financial performance and solid capital reserves as key reasons for the upgrade. Analysts pointed to the company’s ability to weather market volatility while maintaining its profitability and dividend growth.
📉 Downgrades:
🔻 UBS ➝ Downgraded on January 6, 2025, adjusting the price target to $610. Concerns over weaker-than-expected investment banking revenue and ongoing market challenges drove the decision. Analysts believe that economic conditions could create headwinds for Goldman’s deal-making and advisory businesses.
🔻 KBW ➝ Recently downgraded from Outperform to Market Perform, revising the price target from $690 to $660. The downgrade was influenced by slower deal-making activity in early 2025, as well as inflationary pressures and regulatory uncertainties. Analysts also noted that while Goldman Sachs remains a financial powerhouse, its near-term growth prospects may be limited by macroeconomic factors.
📊 Consensus Price Target:
🔹 The average analyst price target for Goldman Sachs is $650.62, reflecting a potential upside of approximately 16.25% from its current price of $559.67.
🔹 Price targets range from $504 on the low end to $782 on the high end, showing divergent opinions on the firm’s performance outlook.
Analysts remain cautiously optimistic about Goldman Sachs, acknowledging its long-term strength while also recognizing near-term risks tied to economic conditions and market activity.
Earning Report Summary
Goldman Sachs wrapped up the fourth quarter of 2024 with solid numbers, pulling in $13.87 billion in revenue and $4.11 billion in net earnings. Despite some market challenges, the firm managed to post strong results across its core business areas, showing once again why it remains a dominant force in the financial industry.
Investment Banking Shows Resilience
The investment banking segment brought in $2.00 billion this quarter, bouncing back thanks to a pickup in debt underwriting activity. Companies were looking to raise capital, and Goldman was there to facilitate the deals. Equity underwriting also played a role, with strong IPO activity boosting results. While the deal-making environment hasn’t fully returned to its previous highs, signs of improvement are starting to show.
Trading Business Holds Steady
The Global Markets division, which houses Goldman’s trading operations, delivered $4.50 billion in revenue. Both fixed income and equities trading contributed, with particular strength in mortgages and commodities. Equities trading added $2.50 billion, benefiting from strong demand for derivatives and cash trading products. Meanwhile, fixed income trading, which pulled in $2.00 billion, remained steady despite some market volatility.
Asset Management Sees Gains
Goldman’s asset management division generated $3.00 billion this quarter, fueled by strong performances in private equity and lending. Gains from equity investments were a bright spot, reflecting well-timed positions in private markets. Lending and debt investments also performed well, benefiting from solid interest income.
Wealth and Consumer Banking Continues to Grow
The firm’s Consumer & Wealth Management division saw $1.50 billion in revenue, with wealth management contributing the bulk at $1.00 billion. This growth was driven by higher client assets under management and increasing fees from advisory services. On the consumer banking side, higher deposits and credit card lending helped push revenues higher.
Keeping Costs in Check
Expenses came in at $8.00 billion, with compensation costs rising in line with performance. Despite that, the firm maintained a solid efficiency ratio of 57.7 percent, showing strong cost management.
Goldman returned $3.00 billion to shareholders this quarter, splitting it between $2.00 billion in share buybacks and $1.00 billion in dividends. This highlights the firm’s ongoing commitment to rewarding investors while maintaining a strong capital position, with a Common Equity Tier 1 (CET1) ratio of 14.2 percent.
Final Takeaway
Goldman Sachs continues to execute well despite a challenging economic backdrop. With its trading and asset management divisions holding steady and investment banking showing signs of life, the firm remains well-positioned for future growth.
Financial Health and Stability
Dividends are only as good as the financial health of the company paying them. Fortunately, Goldman Sachs is in a strong position when it comes to liquidity and profitability.
The company holds nearly $1 trillion in cash, providing it with a massive financial cushion. With a return on equity of 11.91%, GS is delivering solid profitability, and its current ratio of 1.50 indicates that it has more than enough assets to cover short-term liabilities.
One potential concern is Goldman’s debt. The firm has a total debt of $747.98 billion, giving it a debt-to-equity ratio of 611.11%. While that number looks concerning at first glance, it’s important to remember that banks operate with much higher leverage than most other industries. Goldman has a history of managing its debt effectively, and as long as it continues generating strong cash flows, this shouldn’t be an immediate concern.
From a margin perspective, Goldman Sachs remains highly efficient. Its profit margin stands at 27.37%, while its operating margin is even stronger at 37.85%. This level of profitability gives it plenty of flexibility to maintain and grow its dividend over time.
Valuation and Stock Performance
Goldman Sachs stock isn’t necessarily cheap, but it’s not overvalued either. Based on valuation metrics, the company appears to be trading at a reasonable price given its earnings potential.
- Trailing P/E: 13.81
- Forward P/E: 12.05
- Price-to-Book Ratio: 1.61
At its current price of $533.88 per share, GS has pulled back from its 52-week high of $672.19. This recent decline of 4.61% could create an opportunity for long-term investors who are willing to hold through potential market fluctuations.
Over the past year, Goldman Sachs stock has significantly outperformed the broader market, rising 44.93% compared to the S&P 500’s 12.74% gain. That kind of performance makes it appealing not just for dividend seekers but also for those looking for a mix of income and capital appreciation.
One factor to keep in mind is that Goldman Sachs stock has a beta of 1.36, meaning it tends to be more volatile than the overall market. That’s something to consider for those who prefer a steadier income stock.
Risks and Considerations
No investment is without risk, and GS is no exception. While the company has a strong dividend and financial position, there are a few factors to watch.
📉 Economic Cycles: Goldman Sachs makes most of its money through investment banking and trading, which are highly sensitive to economic conditions. In a market downturn, earnings could be negatively impacted.
🏦 Regulatory Challenges: As a major financial institution, Goldman Sachs operates under strict regulations. Any changes in government policies, such as increased capital requirements, could affect profitability.
📊 High Leverage: While common for banks, GS’s debt-to-equity ratio is high. If economic conditions weaken, high leverage could become a larger concern.
🔄 Market Volatility: Because Goldman Sachs is tied closely to financial markets, it can experience more volatility than traditional dividend stocks. Those looking for a steady, defensive dividend play might want to factor this in.
Despite these risks, Goldman Sachs has a history of navigating uncertain environments well. It has successfully managed economic downturns and continues to generate strong returns for shareholders.
Final Thoughts
Goldman Sachs may not be the first name that comes to mind when thinking about dividend stocks, but it has quietly built a strong track record of returning capital to shareholders. With a 2.14% yield, consistent dividend growth, and a low payout ratio, GS provides a solid combination of income and long-term appreciation potential.
For investors who are comfortable with some volatility and want exposure to a blue-chip financial stock with strong dividend growth, Goldman Sachs offers an intriguing option. While it may not have the high yield of some other bank stocks, its ability to consistently grow dividends while maintaining strong financials makes it a compelling choice for those looking for income and capital growth in the financial sector.
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