7 Dividend Stocks That Want to Pay You More Money
Needless to say, Goldman Sachs(GS) has faced an uphill battle in public relations for the last several years (particularly this year), and that sentiment has worked its way into the market for shares of the world's most villainized public company. Investors should frankly have some major concerns about the target on Goldman's back, whether it's justified or not. A reputation for exploiting customers isn't going to win any friends when Goldman competes for business with increasingly aggressive rivals -- so now more than ever, the firm needs to be contrite and work towards rebuilding its image.
Goldman is one of the few firms left out there that's got a "legacy" investment bank business model. The firm is still one of the biggest investment banks out there, a lucrative business that generates impressive returns for shareholders. But the business isn't what is used to be; underwriting tends to ebb and flow with market levels, and with investor anxiety creeping back up, firms like GS could be in store for choppy investment banking revenues.
At the same time, a tougher trading environment and stricter government regulation (the result of GS' restructuring to a bank holding company) means that the trading profits of yore aren't likely to grace the firm's income statement quite the same way.
But while Goldman's business is less attractive than it used to be, it's still pretty attractive. The firm is a major player in a business with huge barriers to entry, a fact that all but guarantees solid financial performance quarter after quarter as long as Goldman can reign in its risk exposure.
That financial strength is part of the reason for the firm's 31.4% dividend increase this week. The move brings GS' yield to 1.62% at current levels. Ultimately, I think this stock lacks a compelling reason to buy right now.