5 Best Large Cap Dividend Growth Stocks To Buy

2. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Shareholders: 137

5-Year Dividend Growth Rate: 17.4%

Mastercard Incorporated (NYSE:MA) is the first of the two major credit card companies that close out this list, both of which are also being buoyed by rising rates. Mastercard’s dividend yield is stands at just 0.59%, but with a payout ratio of just 19% and booming earnings, it wouldn’t be surprising to see that top 1% before long.

Mastercard shares are down 11% this year as investors fear the effect that a recession will have on consumer spending, but the results through the mid-point of this year have been anything but worrisome for the company. Mastercard’s Q2 revenue soared by 27% year-over-year on a constant currency basis, hitting $5.5 billion, while its net income for the first half of the year came in at just under $5 billion.

Hedge fund ownership of Mastercard Incorporated (NYSE:MA) has fallen by 13% over the past year, but the company nonetheless ranks as the sixth most popular among hedge funds, which own a combined $15 billion worth of the company’s shares. Charles Akre’s Akre Capital Management owned a larger MA stake as of June 30 than industry titans like Warren Buffett and Ken Fisher, holding 5.86 million shares worth $1.85 billion, with the fund having 14.8% 13F exposure to the stock.

Baron Funds’ Baron Fintech Fund talked about Mastercard Incorporated (NYSE:MA)’s solid payment volumes in the fund’s Q2 2022 investor letter:

“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Mastercard Incorporated (NYSE:MA) added the most value. These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”