Is Thermo Fisher Scientific Inc. (TMO) America’s best dividend stock, according to analysts?
Recently, I’ve published a list of According to analysts, 13 best American dividend stocks. In this article, we look at where Thermo Fisher Scientific Inc. (NYSE: TMO) competes against other top American dividend stocks.
Dividend paying stocks have long been profiting investors by providing consistent and solid returns. During periods of economic uncertainty, they have generally been implemented more reliably than many other types of investments. Because of these qualities, more investors are relying on dividend stocks to take advantage of the compounding potential. This growth in optimism has encouraged several companies to join dividend clubs. This was evident in the way high-tech companies began eagerly issuing dividends in 2024.
Dividends paid by S&P companies reached a new high of $167.6 billion in the fourth quarter of 2024, up 6.7% from $157 billion in the last quarter, according to a report by S&P Dow Jones Indices. This also represents an 8.7% increase compared to $154.1 billion paid in the fourth quarter of 2023. For the year, total dividend payments were $629.6 billion in 2024, up 7.0% from the $58.82 billion distributed in 2023. The report further stated that it specified dividends beyond the S&P index.
Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, made the following comment on the dividend:
“Under tax increases, some of the spending could move from buybacks to dividends. However, no shift was considered dollar-based, as dividends remained a long-term, pure cash flow item that must be incorporated into the corporate budget.”
Dividends have played a key role in driving overall returns from long-term equity investments. This was highlighted in a study by London-based Guinness global investors, examining the performance of a wider market until 1940. According to the analysis, dividends and reinvestment payments account for approximately 94% of the index’s total return over that period. To put that into perspective, the $100 investment made at the end of 1940 would have grown to around $525,000 by the end of 2019 if dividends were reinvested.
The report also noted that the longer the investment, the more important the dividend becomes a more important part of the total revenue. Since 1940, in the broader market, dividends account for approximately 27% of total revenue over a typical one-year holding period. By extending it to three years, their contributions will rise to 36%. It rose to 40% over five years, reaching 47% over 10 years. For investors who have held their positions for 20 years, dividends account for around 57% of their total revenue. Due to this performance, analysts also recommend investing in dividend stocks.
Is Thermo Fisher Scientific Inc. (TMO) America’s best dividend stock, according to analysts?
Laboratory workstation with laboratory products and services.
Our Methodology:
Create this list and scan the Insider Monkey quarter database for 4th quarter, for US companies with a strong dividend policy and traded on US stock exchanges. From that group, as of April 20, they further refined the selection criteria by identifying stocks with more than 5% potential based on analyst price targets.
At Insider Monkey, I’m obsessed with hedge funds. Why are hedge funds interested in the stocks they accumulate? The reason is simple. Our research shows that mimic the top stock picks of the best hedge funds can outperform the market. Quarterly Newsletter’s strategy was to select 14 small and large caps per quarter, returning 373.4% since May 2014, surpassing the benchmark by 218 percentage points (For more information, please see here).
Possibility of an increase as of April 20th: 46.18%
Thermo Fisher Scientific Inc. (NYSE: TMO), a leading US-based biotech and life science company, surpassed expectations in the fourth quarter, earnings of $6.10 per share at $6.10 in revenue, with Wall Street forecasts exceeding $5.94 and $1.128 billion, respectively. The biotech sector continues to keep its spending down, but expected interest rate cuts could ease funding conditions and act as a tailwind.
Looking forward to 2025, Thermo Fisher Scientific Inc. (NYSE: TMO) expects adjusted revenue to fall between $23.10 and $23.50 per share, along with analyst forecasts. As a leading player in the healthcare and pharmaceutical industry, Thermo Fisher allows investors to be exposed to long-term growth in the sector without facing the risks associated with patent expiration or groundbreaking drug reliance. Its business model is built for stability, with over 80% of revenue coming from repeated sources.
Thermo Fisher Scientific Inc. (NYSE: TMO) also demonstrated strong cash generation in recent quarters, bringing in $3.3 billion in operating cash flow and $2.8 billion in free cash flow. Throughout 2024, it returned $4.6 billion to shareholders through dividends and buybacks. The company currently pays a quarterly dividend of $0.43 per share, up 10% in February, marking its eighth consecutive year of dividend growth. As of April 20th, the stock’s dividend yield was 0.40%.
Overall, TMO 1st place According to analysts, it is on the list of America’s best dividend stocks. While we acknowledge the potential of TMO investments, our belief lies in the belief that some deeply undervalued dividend stocks offer higher returns and are greater promise for doing it within a shorter time frame. If you’re looking for a deep, undervalued dividend stock that’s more promising than TMO, but trades at 10 times its revenue and increases its revenue at digit rates of twice the year, Cheap dividend stocks with dirt.
