Goldman highlights top sector picks for high dividend growth and yield
Lemon_tm/iStock via Getty Images

Goldman Sachs boosted its forecast for dividend growth this year, with earnings growth the primary driver.
The equity team now sees dividend growth of +10% for 2022.
S&P 500 (SP500) (SPY) dividends per share "grew by +11% year/year in 1Q 2022," strategist David Kostin wrote in a note. "In contrast, the futures market is expecting S&P 500 dividend growth to be negative in 2023 and 2024."
 "LTM dividends have not declined year/year outside of a recession in over 60 years," Kostin said. "Looking ahead, our forecast implies 6.7% CAGR dividend growth over the next ten years, significantly above market pricing of 0.4%."
"We continue to recommend investors own stocks with high dividend yield and growth," he added. "Dividend stocks currently trade at attractive valuations and have historically outperformed during periods of elevated inflation."
Goldman's High Dividend Growth basket comprises stocks with above-average dividend yields, high projected DPS growth and moderate payout ratios. The median constituent is forecast to grow dividends annually by 11% through 2023.
The stocks by sector are:
Communication Services (XLC)

Lumen Technologies (NYSE:LUMN), 2022 estimated dividend yield 9.5%, 2023E DPS/current price 9.5%
Verizon (VZ), 5.3%, 5.4%
Omnicom (OMC), 3.8%, 3.8%
Interpublic (IPG), 3.4%, 3.6%
Comcast (CMCSA), 2.5%, 2.7%

Consumer Discretionary (XLY)

Whirlpool (NYSE:WHR), 3.8%, 4.5%
Best Buy (BBY), 3.8%, 4.3%
Tapestry (TPR), 3%, 3.6%
Darden Restaurants (DRI), 3.4%, 3.5%
Advance Auto Parts (AAP), 2.9%, 3.4%
Ford Motor (F), 2.7%, 2.7%

Consumer Staples (XLP)

Conagra (NYSE:CAG), 3.6%, 3.8%
Molson Coors (TAP), 2.9%, 3%
PepsiCo (PEP), 2.5%, 2.7%

Energy (XLE)

Devon Energy (NYSE:DVN), 7.7%, 7.8%
Pioneer Natural Resources (PXD), 6.5%, 5.6%

Financials (XLF)

Huntington Bancshares (NASDAQ:HBAN), 4.7%, 5.1%
T. Rowe Price (TROW), 3.7%, 4.1%
Invesco (IVZ), 3.8%, 4.1%
Morgan Stanley (MS), 3.5%, 3.7%
JPMorgan Chase (JPM), 3.3%, 3.6%
Regions Financial (RF), 3.3%, 3.6%

Healthcare (XLV)

Gilead Sciences (GILD), 4.7%, 5%
Viatris (VTRS), 4.6%, 5%
AbbVie (ABBV), 3.6%, 3.9%
Organon (OGN), 3.4%, 3.5%
Amgen (AMGN), 3.3%, 3.4%
Merck (MRK), 3.2%, 3.4%
Bristol-Myers Squibb (BMY), 2.1%, 3%

Industrials (XLI)

UPS (UPS), 3.2%, 3.4%
Snap-on (SNA), 2.7%, 3%
Fastenal (FAST), 2.2%, 2.4%
Johnson Controls (JCI), 2.3%, 2.4%

Information Technology (XLK)

IBM (IBM), 4.9%, 4.9%
Seagate Tech (STX), 3.4%, 3.6%
Intel (INTC), 3.1%, 3.2%
Corning (GLW), 3%, 3.2%
Broadcom (AVGO), 3.9%, 3.2%
HP (HPQ), 2.7%, 3%
Texas Instruments (TXN), 2.7%, 3%
NXP (NXPI), 1.9%, 2.5%
Skyworks Solutions (SWKS), 2%, 2.2%
Paychex (PAYX), 2.1%, 2.2%
Analog Devices (ADI), 1.8%, 2%
Automatic Data Processing (ADP), 1.8%, 2%
Fidelity National (FIS), 1.8%, 2%
Microchip Technology (MCHP), 1.6%, 1.7%

Materials (XLB)
Packaging of America (PKG), 2.8%, 3%
Real Estate (XLRE)
Simon Property Group (SPG), 5.9%, 6.9%
Utilities (XLU)
NRG Energy (NRG), 3.8%, 4%
Dividend ETFs become a beacon of hope.