In this article, we will take a look at the 10 Best Large Cap Dividend Growth Stocks to Invest In.
Dividends don’t always get much attention, but they’ve quietly driven a large share of long-term returns. A report from Franklin Templeton shows that from 1960 through the end of last year, about 85% of the S&P 500 Index total return came from reinvested dividends and compounding. That’s a large portion of the outcome coming from something often treated as secondary.
Strategies built around dividends tend to bring a bit more balance. They can offer a steady income, some stability, and a degree of protection when conditions become less predictable. Right now, the global outlook still feels uncertain. In that kind of setting, investors often move toward areas that feel more dependable. Dividend stocks, particularly those backed by strong businesses, usually generate steadier cash flows. Those cash flows are easier to model and value. Compared to growth stocks, where future expectations can shift quickly, dividend-paying companies often involve fewer assumptions when estimating intrinsic value. That makes them useful as a stabilizing piece within a broader portfolio.
There’s also the way they behave when markets pull back. Franklin’s report further mentioned that dividend stocks have tended to hold up better during downturns, helping to reduce volatility while still leaving room for gains when conditions improve. Looking at the three-year period ending December 31, 2024, dividend-paying stocks showed lower volatility and smaller drawdowns than the broader market across global, US, and European markets.
Given this, we will take a look at some of the best large-cap stocks that pay dividends.
Photo by Sharon McCutcheon on Unsplash
Our Methodology:
For this list, we screened for dividend companies with market caps above $10 billion and identified companies that have raised their dividends consistently over the years. From there, we picked companies that have recently reported noteworthy developments likely to impact investor sentiment. These companies are also popular among elite funds and analysts.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. Atmos Energy Corporation (NYSE:ATO)
Number of Hedge Fund Holders: 37
On April 27, Bank of America analyst Ross Fowler raised the firm’s price recommendation on Atmos Energy Corporation (NYSE:ATO) to $206 from $177. It reiterated a Neutral rating on the shares. The firm expects Atmos to report Q2 EPS of $3.39, matching consensus, the analyst tells investors in a preview. The firm is rolling its valuation year to 2028.
On April 21, Truist Financial initiated coverage of Atmos Energy with a Hold rating and a $195 price target. The firm launched coverage of 20 names in the power and utilities group. Vertically integrated electric utilities are “clear winners” in building the infrastructure to serve load growth for data centers, the analyst tells investors in a research note. Truist believes investors should lean into growth in the space and names American Electric Power, Entergy Corporation, and Xcel Energy as top picks. It also highlights Ameren Corporation, CMS Energy Corporation, and DTE Energy Company.
Atmos Energy Corporation (NYSE:ATO) is a natural gas-only distributor. The company delivers natural gas to over 3.3 million distribution customers across more than 1,400 communities in eight states, mainly in the South. It also manages proprietary pipeline and storage assets, including intrastate natural gas pipeline systems in Texas.
9. Franklin Resources, Inc. (NYSE:BEN)
Number of Hedge Fund Holders: 38
On April 29, Goldman Sachs raised its price recommendation on Franklin Resources, Inc. (NYSE:BEN) to $34 from $30.50. It reiterated a Buy rating on the shares. Franklin Resources reported stronger-than-expected Q2 results, reflecting improving momentum in private markets fundraising and fee-related earnings, the analyst tells investors in a research note. The firm says the outlook is supported by accelerating organic growth, strong evergreen inflows, disciplined expense management, and a faster-than-expected path toward margin expansion. It also points to a more constructive long-term earnings trajectory relative to the current valuation.
On April 29, Barclays analyst Benjamin Budish upgraded BEN to Equal Weight from Underweight. It also set a price target of $31, up from $26. The company’s fiscal Q2 report was solid and represented a continuation of improving flows, raised guidance, and solid cost controls, the analyst tells investors in a research note. Barclays cites improving fundamentals for the upgrade of Franklin Resources.
Franklin Resources, Inc. (NYSE:BEN) is a global investment management company, with subsidiaries operating as Franklin Templeton and serving clients in more than 150 countries. Through its specialist investment managers, the company offers capabilities across equity, fixed income, alternatives, and multi-asset solutions.
