Wall Street Loves This AI Stock That Grew Its Dividend 150% Last Year

By Trey Thoelcke Published Apr 5, 10:15AM EDT

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Wall Street Loves This AI Stock That Grew Its Dividend 150% Last Year — © RFarrarons / Getty Images

There are many reasons investors love dividends. They provide assurance that a company is financially healthy enough to reward investors. Dividend stocks tend to perform better in market downturns and recessions. Dividends may offer tax advantages and help mitigate losses. And they offer total return (stock appreciation plus distributions), which is attractive for income-seeking investors. So a big dividend hike, like at Vertiv Holdings Co. (NYSE: VRT | VRT Price Prediction) last year, is sure to garner investor attention.

Vertiv’s annual dividend increased last year from $0.01 per share to $0.025, a 150% increase. However, the company switched to a quarterly payout this year, with a dividend of $0.025 in March. That puts it on track for a $0.10 annual dividend, another big hike for this year.

Of course, the company has a long way to go to be a Dividend Aristocrat, meaning that it has increased its payout every year for at least 25 years. However, it has paid out that initial penny per share yearly since it was founded in 2020.

Vertiv’s Prospects

This dividend payer designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. Its offerings include power management products, switchgear and busbar products, thermal management products, integrated rack systems, modular solutions, and management systems that are integral to e-commerce, online banking, file sharing, video on-demand, energy storage, wireless communications, Internet of Things, online gaming and more.

As mentioned, the company was founded in 2020, and it is headquartered near Columbus, Ohio. Companies in the same industry include Powell Industries Inc. (NASDAQ: POWL) and Preformed Line Products Co. (NASDAQ: PLPC). (See two stocks that are quietly capitalizing on the AI boom.)

Vertiv joined the Nvidia Partnership Network last month, cementing its place as an AI growth stock. Earlier, the company released optimistic guidance with its quarterly results, despite disappointing sales numbers. And late last year, Vertiv acquired a former partner.

Vertiv’s share price increased 251.6% last year and is about 78% higher so far this year. It just hit an all-time high of $88.69. That is well above the consensus price target. However, as mentioned above, the high price target is up at $100, which represents a gain of more than 18% in the next 12 months. All but one of the 12 analysts that cover the stock recommend shares.

This stock is a top AI pick of billionaire investors Leon Cooperman, Stan Druckenmiller, and Paul Tudor Jones, as well as TV personality Jim Cramer.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.