In this article, we discuss 12 High Growth Low Dividend Stocks To Invest In.
Dividend stocks offer investors a reliable stream of income, no matter how the market is doing. Even if a stock’s price drops, companies that have been paying dividends for several years make for a steady investment. While total return, which equals dividends plus stock growth, is the most important, dividends can be useful for stability, since they hedge against inflation, offer tax advantages, and are generally less volatile than stocks without dividends. However, there is definitely a trade-off. When a company pays dividends, it has less money to reinvest in growth, which can slightly lower the stock price. Still, for long-term investors, dividend stocks are a great way to build wealth while getting paid passively.
As economic conditions change and interest rates fluctuate, fixed-income investments and high-growth sectors can also present valuable opportunities. Kathy Jones, chief fixed income strategist at Charles Schwab, told CNBC on January 23, 2025, that the economy has been growing faster than expected. With fiscal policies still fueling growth on top of an already strong economy, inflation may struggle to hit the Fed’s 2% target. Given this backdrop, Treasury Inflation-Protected Securities (TIPS) look particularly appealing right now, offering some of the highest real yields in the market. Jones also sees solid opportunities in investment-grade bonds, suggesting investors keep bond durations slightly below average to take advantage of potential yield improvements.
On the equities side, Jeremiah Buckley, portfolio manager at Janus Henderson, believes the same long-term growth trends that have driven the market over the past two years are still going strong. However, market sectors have reacted differently under the new government and its policies. He sees AI, software, capital markets, and travel as promising investment areas. Capital markets have a positive outlook, and travel demand is holding up well, backed by strong Q4 data from credit card companies and airlines. Buckley also expects people to keep spending big on cruises in 2025. These are some of the high growth industries that investors could explore for their stock portfolio.
A businessman checking a graph, indicating the steady growth of his specialty finance company.
Our Methodology
For this article, we used the Finviz stock screener to filter out stocks with dividend yields around 0.50% or lower as of February 24. We focused on selecting stocks that have a strong track record of profitability and financial stability. A few of these stocks have only recently begun paying dividends, but given their stability, they are most likely to maintain dividend payments moving forward. The list below is ranked in ascending order of the hedge fund sentiment as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here)
12. McKesson Corporation (NYSE:MCK)
Dividend Yield as of February 24: 0.48%
Number of Hedge Fund Holders: 78
McKesson Corporation (NYSE:MCK) is a global healthcare services company providing pharmaceuticals, business and clinical solutions, medication access and logistics, and medical equipment. On February 4, the company announced the acquisition of an 80% stake in PRISM Vision for $850 million, expanding its reach in ophthalmology, data analytics, and biopharma partnerships. PRISM will become part of McKesson’s US Pharmaceutical segment, and the deal is expected to strengthen MCK’s earnings per share by up to $0.75 within three years.
McKesson Corporation (NYSE:MCK) had a strong third quarter of fiscal 2025, with revenue up 18% to $95.3 billion and adjusted operating profit growing 16% to $1.5 billion. However, revenue fell a bit short of Wall Street expectations of $96.08 billion, impacted by lower-than-expected sales in its U.S. pharmaceutical segment. Driven by its solid performance, MCK raised its full-year adjusted EPS guidance to $32.55 – $32.95, representing a 19% to 20% year-over-year growth. Free cash flow was negative $2.6 billion due to timing shifts, but this will not impact full-year guidance. The company returned $919 million to shareholders during the quarter, including $827 million in share buybacks at an average of $537 per share and $92 million in dividends.
On January 30, 2025, McKesson Corporation (NYSE:MCK) declared a $0.71 per share quarterly dividend. The dividend is payable on April 1, to shareholders on record as of March 3. It is one of the best high-growth stocks to watch.
According to Insider Monkey’s fourth quarter database, 78 hedge funds were bullish on McKesson Corporation (NYSE:MCK), up from 57 funds in the preceding quarter. Arrowstreet Capital was the leading stakeholder of the company, with 928,462 shares worth $529 million.
11. Hilton Worldwide Holdings Inc. (NYSE:HLT)
Dividend Yield as of February 24: 0.23%
Number of Hedge Fund Holders: 79
Hilton Worldwide Holdings Inc. (NYSE:HLT) ranks 11th on our list of the best high growth stocks to buy. It is an American hospitality company that franchises, owns, and leases luxury hotels and resorts globally. On February 5, Mizuho downgraded the stock from Outperform to Neutral on valuation concerns but raised its price target to $263 from $243. Hilton’s stock soared 37% in 2024 and 5% in early 2025, outperforming the broader market. Analysts see it as a top-tier business but believe the valuation leaves little room for further gains.
Hilton Worldwide Holdings Inc. (NYSE:HLT) had a record-breaking fourth quarter, with revenue growth and strong net unit expansion pushing adjusted EBITDA past $3.4 billion, up 11% from last year. The company’s fee-based model and growth strategy continue to pay off. Hilton generated $3 billion in shareholder returns during the quarter, including $150 million in dividends for the year.
On February 6, Hilton declared a $0.15 per share quarterly dividend, in line with previous. The dividend is payable on March 28, to shareholders on record as of February 21.
Among the hedge funds tracked by Insider Monkey, 79 funds were bullish on Hilton Worldwide Holdings Inc. (NYSE:HLT) at the end of Q4 2024, compared to 68 funds in the prior quarter. Bill Ackman’s Pershing Square was the biggest stakeholder of the company, with 5.4 million shares valued at $1.34 billion.
10. Constellation Energy Corporation (NASDAQ:CEG)
Dividend Yield as of February 24: 0.55%
Number of Hedge Fund Holders: 85
Constellation Energy Corporation (NASDAQ:CEG) is a Maryland-based electricity provider that generates power from nuclear, wind, solar, natural gas, and hydroelectric sources. It is one of the best high growth stocks for an income portfolio. On February 19, Citi analyst Ryan Levine raised the stock’s price target to $334 from $284, while maintaining a Neutral rating on the shares. The share price boost follows strong Q4 results, with EPS of $2.44 topping analyst estimates of $1.96 due to higher power prices, nuclear output, and lower taxes. However, Citi observed that wholesale sales dropped, and free cash flow fell short due to working capital changes.
Constellation Energy Corporation (NASDAQ:CEG) thrived in Q4, beating profit expectations due to lower expenses and surging power demand. In January, the company executed a bold move, acquiring Calpine Corp for $16.4 billion, one of the biggest power industry deals in the United States. Q4 adjusted earnings came in at $2.44 per share, beating the $2.15 estimate, while operating expenses dropped 23.6%. For 2025, Constellation expects earnings between $8.90 and $9.60 per share.
On February 18, Constellation Energy Corporation (NASDAQ:CEG) announced a $0.3878 per share quarterly dividend, a 10% increase from its prior dividend of $0.3525. The dividend is distributable on March 18, to shareholders on record as of March 7.
According to Insider Monkey’s fourth quarter database, 85 hedge funds were long Constellation Energy Corporation (NASDAQ:CEG), compared to 78 funds in the last quarter. Philippe Laffont’s Coatue Management was the largest stakeholder of the company, with 6.6 million shares worth nearly $1.5 billion.
