5 Best Large Cap Dividend Growth Stocks To Buy

1. Visa Inc. (NYSE:V)

Number of Hedge Fund Shareholders: 166

5-Year Dividend Growth Rate: 17.8%

Topping the list is Visa Inc. (NYSE:V), which ranks as the fifth most popular stock among hedge funds as of June 30. That’s certainly not due primarily to the company’s dividend, which yields just 0.86%, so there’s a lot to like about Visa as an investment beyond its dividend growth. Visa more than doubled its dividend payments between Q4 2017 and Q4 2022, with the company’s upcoming payment rising by 20% to $0.45.

After growing revenue by 10% in its FY22, Visa’s sales growth is expected to accelerate to 14% in FY23. That pace should continue in the years ahead, with Visa projected to grow revenue and earnings by close to 50% between FY22 and FY26. The overall global credit card market is projected to grow at a CAGR of 7.7% through 2026, which Visa and Mastercard are in a dominant position to capitalize on. With just a 21% payout ratio and burgeoning earnings, Visa should be capable of growing its dividend at a double digit pace for the foreseeable future.

Hedge fund ownership of Visa Inc. (NYSE:V) has jumped by 16% over the past two quarters, vaulting the company into fifth place on the list of most popular stocks among hedge funds. Billionaire investing legends Ken Fisher and Warren Buffett also have large stakes in Visa as of June 30, while Chris Hohn’s TCI Fund Management held the largest stake of 19.9 million shares worth $3.92 billion.

The RiverPark Large Growth Fund bought a small position in Visa Inc. (NYSE:V) during Q3 and is bullish on the industry’s growth potential, as detailed in the fund’s Q3 2022 investor letter:

“We reinitiated a small position in Visa, which we had previously owned for years (selling out of the position at higher levels in February). We continue to believe that the long-term secular growth trend towards digital payments remains intact and has been further enhanced by the COVID crisis. The growth in debit cards, contactless payments, e-commerce, and now, buynow-pay-later (BNPL), are all driving digital payment penetration, and we continue to be impressed with the long-term growth potential of V (and our other payment holdings Mastercard, Adyen, and PayPal).”

For more of the latest stock picks worth considering for your portfolio, check out 10 Best Crude Oil Stocks To Invest In and 11 Best Insurance Stocks That Pay Dividends.

Disclosure: None.

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