Goldman Sachs Says a Market Correction Could Be Coming—Here Are 5 Safer Dividend Stocks Investors May Rotate Into

January 23, 2026 — A top strategist at Goldman Sachs is warning that stocks may be “overdue” for a pullback, and that the historical pattern of market corrections suggests investors should be prepared for more volatility in the months ahead. According to comments highlighted in a recent market note and interview, the firm points out that it has been more than nine months since the last correction—an unusually long quiet stretch by historical standards.

When markets rise for a long time without a meaningful drop, prices can start to run ahead of fundamentals. That doesn’t guarantee a crash—but it can increase the odds of a “reset” move, where investors take profits and re-price risk. In that environment, dividend-paying companies with steady cash flow, durable demand, and defensible business models often become more attractive, especially for people who want income while they wait for the market’s next direction.

This rewritten report breaks down the core message: (1) why Goldman Sachs believes a correction could be near, (2) what “correction” actually means, and (3) five dividend stocks from Goldman’s Conviction List that are described as relatively safer choices—Brixmor Property Group, Duke Energy, The Hershey Company, Johnson & Johnson, and Valero Energy.

What Goldman Sachs Is Warning About—and Why It Matters

Goldman Sachs’ key concern is simple: markets can go a surprisingly long time without a meaningful pullback, but historically they usually don’t. A commonly used definition of a market correction is a decline of more than 10% from a recent high, but not as deep as a bear market (often defined as 20% or more).

Corrections can be triggered by many things—economic slowdown fears, interest-rate surprises, sudden geopolitical risk, earnings disappointments, or policy changes such as tariffs. In the Goldman commentary referenced by 24/7 Wall St., the strategist noted rising global geopolitical tensions and the possibility of additional tariffs as potential catalysts that could shake confidence.

Goldman also reminded viewers that in the past couple of decades, markets have tended to experience recurring pullbacks. While the exact timing varies by study and time period, many long-term market education sources emphasize that drawdowns are normal—even in “good” years. For example, Fidelity notes that since 1980 the S&P 500 has experienced a drop of 5% or more in most calendar years, and a drop of 10% or more in nearly half of years.

In plain English: when a correction happens, it can feel scary in the moment, but it’s often part of the normal rhythm of markets. The bigger question is how investors position themselves so they don’t feel forced to sell at the worst time.

What a “Correction” Is (and What It Isn’t)

A correction is commonly described as a market decline of 10% to 20% from a recent peak. It’s a meaningful drop, but it isn’t automatically a recession, and it isn’t automatically the start of a long bear market.

Some key points that can help investors stay calm:

• Corrections are common. Many market research and investor education sources describe 10% corrections as happening roughly around once per year on average (depending on the time window studied).
• They often recover. Historically, broad markets have typically recovered from corrections over time, though the timeline can vary widely.
• They can create opportunity. A correction may allow investors to buy strong businesses at better prices—especially if the underlying economy remains stable.

If you want a straightforward explainer on the definition, Schwab’s education page is a clear starting point:Market correction: what it means.

Why Dividend Stocks Often Get Attention During Volatile Markets

Dividend stocks won’t “immunize” a portfolio from losses. If the overall market falls, many dividend stocks drop too. But dividend-focused companies can offer two potential advantages during rough patches:

• Cash income while you wait. Dividends can provide a return even if the stock price moves sideways for a while.
• Signals of stability. Companies that consistently pay dividends are often mature, cash-generative businesses. Many prioritize predictable operations and disciplined capital allocation.

That’s why, when talk of a correction increases, investors often “rotate” toward businesses with steadier demand—like utilities, consumer staples, or healthcare—or toward companies with strong balance sheets and durable cash flows.

Goldman’s “Conviction List” Approach: What It Suggests (and What It Doesn’t)

Goldman Sachs’ Conviction List is generally described as a curated set of the firm’s higher-conviction ideas. In the 24/7 Wall St. report, the screen focused specifically on names that (a) are included on the list and (b) offer dividends and a more defensive profile if volatility rises.

Important note: A “conviction” label is not a guarantee. It reflects a view based on research and assumptions that can change. Investors should still consider valuation, personal risk tolerance, diversification, and time horizon.

The 5 Safer Dividend Stocks Highlighted (With Business Snapshot and Why They’re Considered Defensive)

1) Brixmor Property Group (NYSE: BRX) — A Retail REIT Built Around Necessities

What it is: Brixmor Property Group is a real estate investment trust (REIT) that owns and operates a large portfolio of open-air shopping centers across the United States. In the report, the company is described as having roughly 360 retail centers totaling more than 64 million square feet of gross leasable area.

Why it may be seen as “safer”: Many community and neighborhood shopping centers are anchored by stores people use regularly—think groceries, pharmacies, and everyday services. In uncertain markets, investors often prefer businesses tied to routine consumer needs.

Dividend angle: The report highlighted a dividend yield around 4.31%, positioning it as an income-oriented idea.

Goldman target mentioned: A price target of $32 was cited in the piece.

Key risks to remember:

• REITs can be sensitive to interest-rate expectations because higher rates may raise financing costs.
• Retail tenants can be affected by changes in consumer spending.
• Occupancy levels and lease renewal terms matter a lot for long-term stability.

2) Duke Energy (NYSE: DUK) — A Regulated Utility With Predictable Demand

What it is: Duke Energy is a major U.S. electric power and natural gas holding company, headquartered in Charlotte, North Carolina. The report noted its operations across regions including the Carolinas, Florida, and the Midwest, with electric generation spanning sources such as natural gas, nuclear, renewables, and more.

Why it may be seen as “safer”: Utilities are often considered defensive because households and businesses still need electricity and gas in good times and bad. Many utility revenues are shaped by regulated frameworks, which can lead to more predictable cash flow (though regulation can also create constraints).

Dividend angle: The report cited a dividend yield around 3.52%.

Goldman target mentioned: A price target of $141 was cited.

Key risks to remember:

• Utilities often carry large infrastructure spending plans, which can pressure cash flow if costs rise.
• Storms and extreme weather can create operational and repair costs.
• Regulatory decisions can affect allowed returns and customer pricing.

3) The Hershey Company (NYSE: HSY) — A Consumer Staples Brand With Staying Power

What it is: Hershey is a well-known snacks company with a portfolio that includes iconic confectionery brands. The report also referenced its salty snacks business, including brands such as SkinnyPop and Dot’s Homestyle Pretzels.

Why it may be seen as “safer”: Consumer staples—products people buy regularly, even when budgets tighten—can be more resilient during market turbulence. While candy isn’t a “necessity” like electricity, affordable treats often remain popular, and strong brands can sometimes pass through higher costs over time.

Dividend angle: The report cited a dividend yield around 2.77%.

Goldman target mentioned: A price target of $220 was cited in the piece.

Key risks to remember:

• Commodity input costs (like sugar and cocoa) can pressure margins.
• Consumer preferences can shift toward “better-for-you” snacks, affecting product mix.
• Valuation matters: strong brands can still be overpriced in certain market cycles.

4) Johnson & Johnson (NYSE: JNJ) — Diversified Healthcare With Long-Term Demand

What it is: Johnson & Johnson is a global healthcare company spanning pharmaceuticals and medical technology. The report described it as a conservative healthcare giant with multiple therapeutic areas and a diversified product base.

Why it may be seen as “safer”: Healthcare demand tends to be durable because it is driven by medical needs, aging demographics, and ongoing treatment patterns. Diversification across product lines can help reduce reliance on a single drug or segment.

Dividend angle: The report cited a dividend yield around 2.31% and noted valuation context (forward earnings multiple) at the time of writing.

Goldman target mentioned: A price target of $240 was cited.

Key risks to remember:

• Large healthcare firms face policy and pricing pressures.
• Drug pipelines and product cycles can affect growth.
• Legal and regulatory issues can create headline risk for big brands.

5) Valero Energy (NYSE: VLO) — A Dividend-Paying Energy Name With a Refining Focus

What it is: Valero is a major manufacturer and marketer of petroleum-based and lower-carbon transportation fuels, with operations that include refining, renewable diesel (through Diamond Green Diesel), and ethanol. The report also noted Valero’s global sales footprint and its large refining network.

Why it may be seen as “safer” (within energy): Energy can be volatile, but refiners have a different business profile than pure oil producers. Refining profitability often depends on crack spreads and product demand. The report framed Valero as a relatively safer way to have energy exposure, especially given changes in industry capacity over time.

Dividend angle: The report cited a dividend yield around 2.43%.

Goldman target mentioned: A price target of $197 was cited.

Key risks to remember:

• Refining margins can swing sharply with economic conditions.
• Energy stocks can be sensitive to geopolitics and policy shifts.
• Long-term transition toward lower-carbon energy can reshape demand patterns over time.

Why Two of These Picks Hint at an Energy Theme

One detail in the report is that Goldman’s strategist said the research team was increasingly focusing on the energy sector, with the idea that while prices could be flat to down in the near term, conditions could improve later. The list includes Valero, and the broader commentary suggests Goldman is watching energy-related setups for longer-term opportunity.

That doesn’t mean energy is “risk-free.” It means that, in Goldman’s view, certain energy-linked businesses may offer attractive risk/reward—especially those with strong operations, shareholder returns, and the ability to navigate cycles.

How Investors Might Use These Ideas During a Potential Correction

If you’re worried about a correction, you don’t necessarily need to make dramatic moves. Many investors handle volatility by focusing on process instead of predictions. Here are practical ways dividend-oriented ideas can fit into a plan:

Use dividends as a patience tool

A steady dividend can make it emotionally easier to hold through a choppy period. Even if prices fluctuate, income can keep arriving on schedule—assuming the company maintains its payout.

Favor business models with “everyday demand”

Utilities (like Duke), healthcare (like J&J), and staples brands (like Hershey) often have more stable demand than high-growth sectors that depend heavily on cheap money or perfect expectations.

Think in baskets, not single bets

Even “safe” stocks can disappoint. Spreading exposure across sectors—real estate, utilities, staples, healthcare, and selective energy—can reduce the risk of one surprise derailing your whole plan.

FAQs (People Also Ask)

1) What does Goldman Sachs mean by a “correction”?

In market terms, a correction usually means a decline of more than 10% from a recent high, but less than 20%.

2) Are corrections rare?

No. Many investor education sources describe pullbacks and corrections as normal. For example, Fidelity notes that since 1980 the S&P 500 has seen a 5% decline in most years and a 10% decline in nearly half of years.

3) If a correction happens, should I sell everything?

Many long-term investing frameworks suggest that reacting emotionally can lock in losses. A better approach is often to stick to a plan, keep diversification, and ensure your risk level matches your time horizon. (This is general education, not personal financial advice.)

4) Why do dividend stocks get popular when volatility rises?

Dividends can provide income even if prices move sideways, and many dividend payers are mature businesses with steadier cash flow. That can feel more comfortable when markets get jumpy.

5) Which five dividend stocks were highlighted from Goldman’s Conviction List in this report?

The five names discussed were Brixmor Property Group (BRX), Duke Energy (DUK), Hershey (HSY), Johnson & Johnson (JNJ), and Valero (VLO).

6) Are these stocks guaranteed to outperform in a correction?

No. “Defensive” doesn’t mean “can’t fall.” These companies may be considered more resilient due to business stability and dividends, but any stock can decline in a broad sell-off. Diversification and valuation still matter.

Conclusion: A Calm Plan Beats a Perfect Prediction

Goldman Sachs’ message is not that investors should panic—it’s that markets have patterns, and long stretches without a pullback can raise the odds of a correction. Whether the next dip happens next month or later, the bigger takeaway is preparation: own quality businesses, diversify, and consider dividend income as part of your toolkit.

The five dividend stocks highlighted—Brixmor, Duke, Hershey, Johnson & Johnson, and Valero—span different sectors, which can help investors avoid putting all their eggs in one basket. If volatility does arrive, these kinds of steadier, income-producing names are often where investors look first when they want to rotate toward safety—without abandoning the market entirely.

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