Some investors have a preference for hyper-growth companies that have rocketing sales and a lack of profits, whereas others are more comfortable with mature growth titans that have found a way to maintain impressive earnings growth rates and, with that, a track record of returning capital to shareholders over time by way of dividend increases and share buybacks.
Indeed, if you’re a young growth-minded investor who’s all about sales growth and the ability to capture a growing slice of a massive, emerging total addressable market, it can be a wise idea to focus more on the technology and the future potential.
Large-cap dividend payers can be disruptive growers, too!
However, for investors who seek greater predictability and a better night’s sleep, I think the mature dividend-paying growth companies are more than worth sticking with. As the Magnificent Seven companies show us, size and maturity do not take away from a firm’s ability to grow and dominate, especially in the age of artificial intelligence (AI), which could favor the giants with deep enough pockets to invest in infrastructure, organic innovations, talent, and even bets in private AI companies that show promise.
In this piece, we’ll have a look at two dividend payers that still have strong growth stories going into the new year. With attractive valuations and a lot going for them in the new year, I’d be more inclined to favor them over the speculative hyper-growth plays that may very well be the only thing bubbly about this market.
Microsoft
When it comes to mature growth titans, it’s tough to look past Microsoft (NASDAQ:MSFT | MSFT Price Prediction), which has a growing 0.71%-yielding dividend and a ton of AI-driven growth catalysts that could come into effect in the early part of next year. Indeed, shares of MSFT have been quite hot, but not overheated, with shares up a modest 23% year to date, just 5% more than the 18% gain enjoyed by the Mag Seven-heavy Nasdaq 100.
With shares flatlining after a summertime melt-up past $510 per share, now may be a great opportunity to jump into the still attractively valued AI titan as AI use and its embeddedness in software look to accelerate going into 2026. With tons of momentum in the AI cloud, a powerful AI coding platform with GitHub Copilot, and an ambitious plan to launch a free version of Xbox Cloud Gaming to the world (it just came out of beta), it will be interesting to see where the nearly $4 trillion enterprise behemoth heads next as Wall Street pounds the table over its impressive AI strategy.
Wedbush Securities’ Dan Ives thinks Microsoft will crack the $5 trillion market cap milestone and, eventually, the $6 trillion mark as AI workloads power Azure’s growth. I think Ives is right on the money. In around two weeks from now, we’ll get an update from Microsoft as it reports its latest round of quarterly earnings results. I think investors should mark their calendars and brace for a breakout move, given all the AI catalysts on the horizon.
Expedia
Expedia (NASDAQ:EXPE) is another tech-driven dividend grower (0.73% yield) that’s poised to gain in the AI race. The stock trades at 26.9 times trailing price-to-earnings (P/E), which is relatively modest, especially when you consider the impressive guidance management delivered a few months ago. Even Mad Money host Jim Cramer is a fan of Expedia over the likes of other travel plays.
With momentum in gross bookings and generative AI poised to make it easier than ever for consumers to get their stays booked, I certainly wouldn’t sleep on the name just because there’s fear that the U.S. employment numbers could take several steps back from here.
As Expedia’s AI travel assistant and Smart Trip AI get better at their job, I’d look for Expedia to be a prime share-taker as AI comes for the travel booking scene, while many of its rivals look to adapt the transformative technology a bit slower.
Top Gaining Stocks
Top Losing Stocks