With the global crisis of COVID-19 at hand, many companies have started to look for investments that generate high yields. One of the main reasons is the imposition of restriction on the top U.S. companies. In case, these companies agree to avail the stimulus funds of COVID-19, then it will be impossible for them to give away dividends to other companies. Therefore, in order to make things easier for the high-investing companies, Goldman Sachs ruled out a list of 35 stocks that could produce high dividend yields.
This matter can arguably be considered as one of the many prime issues COVID-19 has managed to pull through. The most high-ranking banks are still deciding whether to resume the issuance of dividend payments to keep the cycle of investment running or keep them suspended till the current crisis hit rock bottom. Many executives of high-ranked banks have promised that their ample capital will most likely endure the crisis because, in case of suspension of dividends, it will bring nothing but absolute instability to the entire financial system. However, unlike the U.S. top-rated banks, the banks in Europe have been ordered to terminate dividend payments.
With the help of the Russell 1000 index, Goldman Sachs was able to extract all the necessary requirements to produce this list. With Centerpoint Energy at the top of this list and Raytheon Technologies at the bottom, Goldman Sachs explained that these companies must be prioritized before any other firm because of the powerful yields they were able to produce. The purpose of introducing this list to the investors is to help them identify the right choices. In this crisis, many companies might find themselves in yield traps out of desperation, but this problem can easily be solved if the requirements mentioned by Goldman Sachs are followed religiously.
Infographic by: Visualcapitalist.com