Uncovering the Diamond in the Rough: How a 170% Dividend Grower Is Defying Its "Old News" Tag

Hello, Maverick Observers! Today, let’s debunk a myth and uncover a golden opportunity with a company that’s quietly been doing something extraordinary with dividends.

Often, the best investment opportunities lie where no one else is looking—like in conglomerates. Yes, you heard that right, conglomerates! While they might conjure up images of old-school behemoths like 3M or Honeywell, they’re far from outdated when you know where to look.

Take Danaher Corporation (DHR), for instance. Its dividend yield of just 0.4% might not turn heads at first glance, but here’s the kicker: that payout has skyrocketed by 170% over the past decade!

The Hidden Gem in Plain Sight: Danaher Corporation

Danaher might not be a household name, and I bet even some seasoned investors would struggle to tell you what they do. Well, let me fill you in. Starting out in the 1960s, Danaher was a mixed bag of various businesses, from automotive tools to water-testing gear. But now, it’s sharpening its focus primarily on the healthcare sector.

A Shift to Healthcare: Timely and Strategic

As America ages rapidly—the Alliance of Lifetime Income reports 11,000 Americans will turn 65 daily in 2024—the healthcare sector’s only going to expand. Companies like Johnson & Johnson are obvious choices for investors, but the real savvy lies in picking those who support the drug makers—like Danaher.

Why? Because while big pharma spends billions (JNJ alone dropped $15 billion last year) navigating the arduous 10-15 year journey from drug conception to FDA approval, Danaher is the company behind the curtain, making the tools that help streamline and speed up this process.

Danaher: The "Pick-and-Shovel" Play of the Healthcare Gold Rush

Just as the real winners of the California Gold Rush were the ones selling the tools—picks and shovels—Danaher is doing just that but for the pharmaceutical industry. They’re providing important equipment and innovations that are indispensable for drug development.

Dividend Growth as a Gravity Pull for Stock Prices

Here’s where it gets interesting for us dividend lovers. Danaher’s approach has not only led to substantial dividend increases but has also pulled its stock price up along with it. This phenomenon, which I like to call the “Dividend Gravity Effect,” shows how consistent and significant dividend growth can lead to equally impressive stock price appreciation.

Despite the modest start, Danaher’s focused shift into medical devices and robust management strategies have seen its stock price surge, especially during the pandemic-driven demand for healthcare technologies.

Danaher's Strategic Acquisitions: Fueling Future Growth

Danaher isn't just sitting pretty with its current lineup. Last year, it made some strategic moves to deepen its healthcare imprint. It spun off Veralto, a company focusing on testing food, water, and pharmaceuticals, and acquired Abcam, enhancing its capabilities in antibodies and cellular imaging.

From its origins as a REIT to a powerhouse in healthcare, Danaher's journey is a masterclass in strategic evolution and value creation through acquisitions.

Looking Ahead: What's Next for Danaher?

With recent earnings hinting at a rebound in the biotech sector and an easing of previous market pressures, Danaher’s streamlined focus on healthcare is set to capture more analyst attention and likely bullish sentiment from the market.

So, while some may call it “old news,” we see Danaher as a textbook case of how dynamic dividend growth linked with smart corporate strategy can lead to sustained investor gains.

My System's Upcoming Stars

And if you’re wondering about what other opportunities are brewing, stay tuned. Our system has identified several more candidates poised for similar growth, driven by robust dividend strategies.

Thanks for joining today’s financial deep dive. As always, check out our Member Area for more insights and actionable investment advice tailored for real growth.

Keep investing wisely and stay Maverick!

Yours in a dividend-powered future,

Dennis Moore

Chief Investment Strategist

Maverick Income Dispatch