Companies prioritizing internal growth through investments in capital expenditures and research and development are poised to outperform, according to Goldman Sachs. The firm advises clients to consider investing in companies with high levels of these expenses, highlighting their outperformance relative to those returning cash to shareholders. Capex, including investments in equipment, machinery, and buildings, and R&D, focusing on creating new products or services, are viewed favorably in a strong economic environment. Goldman’s data shows that companies with higher percentages of capex and R&D per market capitalization have fared well in the S&P 500. Examples include travel companies such as Norwegian Cruise Line, United Airlines, American Airlines, and Delta Air Lines, as well as tech companies like Meta Platforms, Intel, HP, and Western Digital.
Goldman Sachs Advises Buying Companies Prioritizing Internal Growth
