Stress tests Goldman

Stress Test

Concerns have emerged that Goldman Sachs — long the leader on Wall Street — may lose an important engine of profitability.

The New York Times reports that on the Federal Reserve stress tests last week, Goldman performed poorly compared with other big banks. Now analysts and investors are worried that the bank could be barred by regulators from buying back its own stock or increasing dividends.

Goldman has used dividends and share buybacks to appeal to investors at a time when other elements of the bank’s business have faced challenges. When companies buy shares of their own stock on the open market, it generally increases the amount of profits attributed to every share, an important metric for investors.

To access the complete New York Times article hit the link below:

At Goldman Sachs, Stress Test Results Could Endanger an Important Profit Source

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