# Goldman Sachs and Morgan Stanley Dividend Stock Picks

**Published:** 2026-09-09T10:32:41.539Z  
**Topic:** S P 500  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/2a343912-5f89-4f3d-8ebc-eca8567a84d5

Goldman Sachs and Morgan Stanley highlight dividend stocks to navigate market volatility. See which energy and financial firms offer yields up to 6.43%.

The S&P 500 has climbed 0.4% in the first four days of September, as investors turn toward dividend-paying stocks to mitigate volatility stemming from rising Treasury yields and uncertainty regarding Federal Reserve interest rate policy [1]. Analysts at Goldman Sachs and Morgan Stanley are currently highlighting specific dividend-paying equities as a defensive strategy to stabilize portfolios against high valuations and shifting macroeconomic conditions [1, 2].

| At a glance | |
|---|---|
| S&P 500 September Gain | 0.4% |
| UPS Dividend Yield | 6.43% |
| Devon Energy Dividend Increase | 33% |
| East West Bancorp Earnings | $2.63/share |

## Dividend strategies in volatile markets
Morgan Stanley strategist Todd Castagno notes that companies raising dividends have historically outperformed the broader market by an average of 3.1% in the six months following the increase [1]. This defensive positioning comes as traders monitor potential Federal Reserve rate hikes scheduled for less than two weeks from now [1]. While the broader market faces pressure from rising oil prices and Treasury yields, analysts are screening for firms with consistent payout growth to provide a reliable income stream [1].

Energy and financial sectors feature prominently in recent institutional research. Devon Energy, which recently appeared on Goldman Sachs’ list of cheap dividend-paying energy plays, raised its quarterly dividend by 33% to 32 cents per share in May [1]. The stock is up 31% year-to-date as oil prices approach $100 a barrel [1]. Similarly, East West Bancorp reported second-quarter earnings of $2.63 per share, exceeding the FactSet consensus of $2.61 per share, and has raised its full-year net interest income growth forecast to a range of 7% to 9% [1].

## High-yield opportunities
Goldman Sachs’ Conviction List, which identifies stocks analysts believe are highly likely to outperform, includes United Parcel Service (UPS) with a dividend yield of 6.43% [2]. Despite headwinds from the company’s decision to reduce shipping volume for Amazon by more than 50% by the second half of 2026, the firm maintains a $132 price target on the stock [2]. Other notable dividend plays include Citizens Financial Group, which offers a 2.56% yield, and ConocoPhillips, which maintains a 2.55% yield following its $22.5 billion acquisition of Marathon Oil in November 2024 [2].

## What to watch
*   **Federal Reserve Meeting:** The central bank’s upcoming interest rate decision, occurring in less than two weeks, remains a primary catalyst for market volatility [1].
*   **Energy Price Trends:** Monitor the price of oil as it approaches the $100-per-barrel threshold, which influences the performance of exploration and production plays like Devon Energy and ConocoPhillips [1, 2].
*   **Dividend Sustainability:** Watch for updates on UPS’s logistics strategy as the company continues to pivot toward more profitable business segments following the reduction of its Amazon contract [2].

The current focus on dividend-paying stocks reflects a broader attempt by institutional investors to find stability as the market grapples with the dual pressures of rising energy costs and potential monetary tightening. Whether these income-focused strategies can maintain their outperformance depends on the Federal Reserve's upcoming policy path and the ability of these firms to sustain their payout growth in a slower-growth environment.

## Sources
1. CNBC — [These companies are growing their dividends and may see upside, Morgan Stanley says](https://www.cnbc.com/2026/09/04/these-companies-are-growing-their-dividends-morgan-stanley-says.html)
2. 24/7 Wall St. — [5 Top Goldman Sachs Stock Picks Pay Big Dividends (One Yields Over 6%)](https://247wallst.com/investing/2026/09/01/5-of-goldman-sachs-top-stock-picks-pay-big-dividends-and-one-yields-over-6/)

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Cite as: TrendWatcher, "Goldman Sachs and Morgan Stanley Dividend Stock Picks", https://www.trendwatcher.in/article/2a343912-5f89-4f3d-8ebc-eca8567a84d5