Dividend-paying stocks can help nervous investors weather the market's wild ride, and Goldman Sachs called out a list of its favorite buy-rated names that are poised to offer solid income. Stocks rallied for a second day on Wednesday, this time powered by hopes that trade tensions between the U.S. and China could ease and by President Donald Trump's declaration that he has " no intention " of firing Federal Reserve Chair Jerome Powell. Nevertheless, investors have been on a rocky road since Trump unveiled his "reciprocal" tariffs on April 2. The S & P 500 has lost nearly 5% since then. It will take more than attractive dividend yields alone to effectively protect investors' portfolios, so Goldman Sachs recently drew up a list of stocks that offer income, solid growth prospects for dividends and the ability to sustain the payments. In a recent screen, the Wall Street investment bank searched through buy-rated names in its research coverage universe that pay dividend yields of at least 2.5%. These stocks are expected to have a compound annual growth rate for dividends and free cash flow/earnings per share of at least 5% from 2024 through 2026. The companies must also offer a measure of safety, based on a dividend coverage ratio exceeding 1.0x in 2025 and 2026. Here are the stocks that turned up on Goldman's screen. PepsiCo is down 7% in 2025, and the stock has a dividend yield of 3.8%. In February, the soft drink and potato chip maker raised its annual dividend 5%, its 53rd consecutive annual increase. Earlier this month, Bank of America downgraded Pepsi to neutral from buy, dropping its price target to $155 from $185. "In our view, Frito-Lay North America growth is likely to remain below long-term trendline this year," wrote analyst Bryan Spillane. Nevertheless, the company touts healthy margins. "Despite the challenges PEP has nonetheless been able to protect earnings with prudent [profit and loss] management which helps in a defensive tape," Spillane said. "This resilience is owed in large part to phenomenal gross margin productivity out of their international markets." Analysts are largely neutral on Pepsi, but consensus price targets call for 13% upside from current levels, according to LSEG. Citigroup also showed up on Goldman's screen. Shares are off more than 5% this year, but sport a dividend yield of 3.4%. Just last week, the Jane Fraser-led bank posted first-quarter earnings of $1.96 per share on revenue of $21.6 billion, topping the Street's estimates. Gains in fixed income and equities trading boosted results. Wells Fargo analyst Mike Mayo recently named Citi as one of his top picks. "We single-out Citigroup as showing yet one more quarter when, contrary to many investor concerns, they did not 'stub their toe,'" he said in an April 15 report. Finally, Xcel Energy got the nod from Goldman. In February, the utility and natural gas company raised its dividend by 4.1% to 57 cents per share. Xcel shares are up more than 4% in 2025, and offer a dividend yield of 3.2%. Analysts largely like the company, with 12 of 17 rating it a buy or strong buy, per LSEG. Consensus price targets call for upside of more than 5%. Other names that Goldman called out include Eversource Energy , PPG Industries , Bank of America and Korn Ferry . Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today's dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You'll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
