5 Best Large Cap Dividend Growth Stocks To Buy

Below we present the list of 5 Best Large Cap Dividend Growth Stocks To Buy. For our methodology and a more comprehensive list please see the 15 Best Large Cap Dividend Growth Stocks To Buy.

5. Thermo Fisher Scientific Inc. (NYSE:TMO)

Number of Hedge Fund Shareholders: 93

5-Year Dividend Growth Rate: 14.1%

Thermo Fisher Scientific Inc. (NYSE:TMO) is in the midst of growing its dividend for the fifth straight year following several years of flat dividends. The life sciences and diagnostics company grew its dividend by 15% in the first quarter of this year and has a payout ratio of under 5%, so there’s plenty of untapped room for dividend growth. That said, it will take several years before the stock’s yield is likely to be palatable to some dividend investors, as it currently stands at just 0.24%.

Thermo Fisher more than doubled its revenue between 2016 and 2021, with that figure hitting $39.2 billion last year. It’s accomplished that partly through acquisitions, which the company deploys a significant chunk of its capital on, which is why it’s been somewhat hesitant to get overly aggressive with its dividend. Should the company eventually move away from that strategy and return more of its capital to shareholders instead, they could be in for a windfall.

Hedge fund ownership of Thermo Fisher Scientific Inc. (NYSE:TMO) has more than doubled over the last five years, hitting an all-time high in the first quarter of 2022. Stephen Mandel’s Lone Pine Capital raised its stake in TMO by 80% during Q2 to 932,292 shares worth over $506 million. Ferdinand Groos’ Cryder Capital and Stoyan Hadjivaltchev’s Snowhook Capital Management each have greater than 12% exposure to the stock in their 13F portfolios.

Baron Funds is bullish on Thermo Fisher Scientific Inc. (NYSE:TMO) long-term growth outlook, as revealed in its Q3 2022 investor letter:

“Thermo Fisher Scientific Inc. (NYSE:TMO) is the world’s largest life sciences tools company. Shares fell due to the rotation out of life sciences tools stocks, driven by concerns about a possible global recession, foreign currency exposure, COVID-related lockdowns in China, and reduced levels of biotechnology funding. We continue to believe Thermo Fisher has a strong long-term growth outlook given a large and growing addressable market coupled with its industry-leading scale, commercial infrastructure, e-commerce platform, supply-chain capabilities, and R&D investment.”