As global equity markets hover near record highs, Goldman Sachs is advising investors to start positioning for the next phase, highlighting sectors with robust and growing dividends as a potential safe harbor ahead of anticipated market swings.
In a recent report, the Wall Street giant projected that dividend growth for the S&P 500 will reach 6% in 2026, outpacing the broader market consensus of 5%. This forecast comes as the index has already demonstrated a 7% year-on-year increase in dividends per share for the first three quarters of 2024.
The analysis suggests that after a three-year bull run, a healthy market correction of 10-15% is widely anticipated. This environment, according to Goldman, presents an attractive opportunity for investors to rotate out of high-flying tech stocks and into quality companies with reliable payouts and the potential for significant dividend hikes in 2026.
“Dividend growth is typically a function of earnings growth in the current and prior two years,” the report noted, adding that futures markets appear pessimistic about future dividends, potentially creating a mispricing opportunity.
Goldman Sachs has pinpointed three key sectors—Healthcare, Utilities, and Industrials—as having superior dividend growth prospects. From its coverage, the firm has selected five stocks rated “Strong Buy” that offer compelling value at current levels.
Utilities
Healthcare
Industrials
As a leading global investment bank, Goldman Sachs’s research carries significant weight with institutional and high-net-worth investors. The report provides a clear roadmap for portfolio positioning, suggesting that a strategic shift into profitable, cash-rich industry leaders with a history of sustained dividend growth could offer stability amid potential volatility and position portfolios to capitalize on the expected dividend upswing in 2026.
