I'm a big fan of buy and hold investing and believe it is a great way to grow your wealth.
This can especially be the case with ASX 200 dividend stocks that have the potential to grow their payouts materially in the future.
With that in mind, let's take a look at a couple of buy-rated shares that Goldman Sachs thinks could be top long term options for patient income investors. They are as follows:
Domino's Pizza Enterprises Ltd (ASX: DMP)
The first ASX 200 dividend stock that could be a good buy and hold option is pizza chain operator Domino's Pizza.
Goldman Sachs thinks that it could be a top option due to its undemanding valuation and recent focus on franchisee profitability. The broker feels that the latter could be key to turning around its fortunes. It said:
We have a Buy rating on the stock, as we believe management's focus on franchisee profitability through closure of 80/20-30 locations in Japan/France will help to material improve the quality of the network and help franchisee profitability. With COGs inflation moderating and the company focusing on execution of quality stores, we expect that store growth will be restored following a digestion period. DMP is trading at an undemanding PE valuation relative to its LT average and as such we believe the stock now offers an attractive entry point.
As for income, the broker is forecasting partially franked dividends of $1.13 per share in FY 2025, $1.36 per share in FY 2026, and then $1.62 per share in FY 2027. Based on the current Domino's share price of $29.97, this equates to dividend yields of 3.8%, 4.5%, and 5.4%, respectively.
Goldman currently has a buy rating and $39.10 price target on its shares.
Treasury Wine Estates Ltd (ASX: TWE)
Another ASX 200 dividend stock that could be a good buy and hold option is Treasury Wine. It is the wine giant behind a range of popular luxury brands such as Penfolds, Wolf Blass, and 19 Crimes.
Goldman Sachs likes the company due to its positive earnings growth outlook, which is being underpinned partly by the key Penfolds brand. It also feels that its valuation is attractive given its earnings growth. It said:
Our Buy rating on TWE is premised on accelerating double-digit EPS growth in FY24-27e driven by 1) continued global expansion of Penfolds, especially post the removal of China import tariffs on Australian wine; our recent channel checks suggest positive reception to the returning Australian sourced Penfolds and we expect a ~63pct pre-tariff recovery by 2027. […] TWE is trading modestly below the 5-year historical P/E average.
In respect to dividends, the broker is forecasting partially franked dividends of 36 cents per share in FY 2025, 42 cents per share in FY 2026, and then 50 cents per share in FY 2027. Based on its current share price of $11.55, this equates to yields of 3.1%, 3.6%, and 4.3%, respectively.
Goldman has a buy rating and $15.20 price target on its shares.
