A salesman carries a Best Buy shopping basket in San Francisco, California.
Stocks that pay big dividends haven’t been this cheap in at least 40 years, according to Goldman Sachs.
The valuation gap between high- and low-dividend-yield stocks is close to the widest it has been since around 1980, the bank said. The market is pricing in “an overly pessimistic” level of dividend payouts with the swap-market prices implying a 2.7% growth in S&P 500 dividend per share through 2023, well below Goldman’s estimate for 5% annual growth over the next five years.
“Dividend growth pessimism is evident in the valuation of high dividend yield stocks,” Goldman chief U.S. equity strategist David…