Goldman Sachs Sees 2025 Dividend Growth and 4 High-Yield Passive Income Stocks Are Strong Buys

Investors love dividend stocks, especially the high-yield variety because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. Let’s take a closer look at the concept of total return. Imagine you purchase a stock at $20 that offers a 3% dividend. If the stock price rises to $22 within a year, your total return is 13%. This is calculated by adding the 10% increase in stock price to the 3% dividend.

Founded in 1869, Goldman Sachs is the world’s second-largest investment bank by revenue and is ranked 55th on the Fortune 500 list of the largest U.S. corporations by total revenue. The Wall Street white-glove giant offers financing, advisory services, risk distribution, and hedging for the firm’s institutional and corporate clients. It also produces some of the most respected equity research, and its new piece on the dividend outlook for the S&P 500 was very positive. The report that covered dividend growth for the S&P 500 as a whole said this:

Despite the 6% selloff in the S&P 500 from its February high, the pricing of 2026 growth in dividend futures has remained stable at 1%. Unlike the equity market, dividends did not price in post-election exuberance and have been notably resilient amid market volatility. While the equity market’s pricing of economic growth has been downgraded closer to our economists’ baseline forecast, dividend futures appear to price a pessimistic outlook relative to our forecasts.

We screened Goldman Sachs equity research looking for S&P 500 stocks that the firm has rated Buy and that offer among the highest yields in the venerable index. Four stood out and make sense for growth and income investors charting a course for the rest of what could be a volatile 2025.

Why we recommend Goldman Sachs stocks

Goldman Sachs is the acknowledged leader in the investment landscape on Wall Street and worldwide. The firm’s top-notch research department continues to provide institutional and high-net-worth clients with the best ideas across the investing spectrum and is likely to continue for years.

Altria

This tobacco company offers value investors a great entry point and a rich 7.06% dividend. Altria Group Inc. (NYSE: MO) manufactures and sells smokable and oral tobacco products in the United States through its subsidiaries.

The company provides cigarettes primarily under the Marlboro brand, as well as:

• Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches
• e-vapor products under the NJOY ACE brand

It sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev N.V. (NYSE: BUD), the world’s largest brewer. Earlier this year, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.

The Goldman Sachs price target for the stock is $57 and looks to be going higher soon. Altria recently increased its quarterly dividend by 4.1%, from $0.98 to $1.02 per share, marking its 59th dividend increase in the past 55 years.

Verizon

This top telecommunications company offers tremendous value, trading at 8.75 times estimated 2025 earnings and paying investors a strong 5.96% dividend. Verizon Communications Inc. (NYSE: VZ), through its subsidiaries, provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide.

It operates in two segments:

• Verizon Consumer Group
• Verizon Business Group

The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements.

It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:

• Smartphones
• Tablets
• Smartwatches and other wireless-enabled connected devices

The segment also offers wireline services in the Mid-Atlantic, including the District of Columbia, and northeastern United States through its fiber-optic network, Verizon Fios product portfolio, and copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband
• Data
• Video and conferencing
• Corporate networking
• Security and managed network
• Local and long-distance voice

Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.

The Goldman Sachs price target is $52.

Pfizer

This top pharmaceutical stock was a massive winner in the COVID-19 vaccine sweepstakes but has struggled over the last two years as many people are not getting boosters. Pfizer Inc. (NYSE: PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It pays a rich 6.43% dividend, which has risen yearly for the past 14 years.

The company offers medicines and vaccines in various therapeutic areas, including:

• Cardiovascular metabolic and women’s health under the Premarin family and Eliquis brands
• Biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Sutent, Inlyta, Retacrit, Lorbrena, and Braftovi brands
• Sterile injectable and anti-infective medicines and oral COVID-19 treatment under the Sulperazon, Medrol, Zavicefta, Zithromax, Vfend, Panzyga, and Paxlovid brands.

Pfizer also provides medicines and vaccines in various therapeutic areas, such as:

• Pneumococcal disease, meningococcal disease, tick-borne encephalitis
• COVID-19 under the Comirnaty/BNT162b2, Nimenrix, FSME/IMMUN-TicoVac, Trumenba, and the Prevnar family brands
• Biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Eucrisa/Staquis, and Cibinqo brands
• Amyloidosis, hemophilia, and endocrine diseases under the Vyndaqel/Vyndamax, BeneFIX, and Genotropin brands

Goldman Sachs has a $32 price target for the shares. Pfizer recently increased its quarterly dividend to $0.43 per share, a 2.4% increase from the previous dividend of $0.42. This marks the company’s 345th consecutive quarterly dividend payment and 15th year of dividend growth.

Ford

This legacy carmaker pays shareholders a massive 7.58% dividend. Ford Motor Co. (NYSE: F) develops, delivers, and services a range of Ford trucks, commercial cars, vans, sport utility vehicles, and Lincoln luxury vehicles worldwide.

It operates through five segments:

• Ford Blue
• Ford Model e
• Ford Pro
• Ford Next
• Ford Credit

The company sells Ford and Lincoln vehicles, service parts, and accessories through distributors, dealers, and dealerships to commercial fleet customers, daily rental car companies, and governments.

It also engages in vehicle-related financing and leasing activities through automotive dealers.

In addition, the company provides retail installment sale contracts for:

• New and used vehicles
• Direct financing leases for new cars to retail and commercial customers, such as leasing companies, government entities, daily rental companies, and fleet customers

Further, it offers wholesale loans to dealers to finance the purchase of vehicle inventory, loans to dealers to finance working capital and enhance dealership facilities, purchase dealership real estate, and other dealer vehicle programs.

Goldman Sachs has an $11 target price for shares of the venerable car company. Ford has a regular quarterly dividend of $0.15 per share, which translates to an annual dividend of $0.60 per share. In addition to the regular dividend, Ford has paid special dividends, including a special dividend of $0.18 in 2024 and $0.65 in 2023.

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