What Goldman Sachs actually does

Goldman Sachs is a global investment bank. It advises companies on mergers and stock or bond sales, trades securities for clients, and runs a large asset and wealth management business for institutions and rich individuals. Founded in 1869, it is one of the best-known names on Wall Street.

How the business makes money

It earns fees for advice and underwriting, trading revenue from helping clients buy and sell, and fees and returns on the money it manages. Deal activity and trading profits swing with markets, so results are less steady than a traditional retail bank.

The dividend story

Goldman pays a quarterly dividend and has raised it a lot in recent years as profits and capital have grown, and regulators have allowed larger payouts. It is not a classic Dividend Aristocrat: its payout moves with a cyclical business and with annual stress tests.

What to keep an eye on

  • Deal activity. Mergers and stock sales slow in downturns.
  • Trading results. They can be volatile.
  • Regulation. Capital requirements limit payouts.
  • Strategy shifts. Consumer banking was scaled back after losses.

Quick take

Goldman can deliver strong profits and a fast-rising dividend in good markets, but expect cyclical swings.