ASML Holding(US:ASML) The Motley Fool·2025-02-08 14:23Core Insights - Dividend growth stocks have outperformed the S&P 500 by 2.5 percentage points annually since 1973, providing significant passive income for long-term investors [2] Group 1: ASML - ASML holds over 50% market share in deep-ultraviolet lithography and a near-monopoly in extreme-ultraviolet lithography, crucial for advanced semiconductor manufacturing [4] - Taiwan Semiconductor Manufacturing (TSMC) plans to increase capital expenditures by approximately 30% in 2025, indicating strong demand for ASML's equipment [5] - Management expects sales growth between 9% and 16% through 2025, making it an attractive buy opportunity as shares are down 33% from their highs [6] Group 2: Wingstop - Wingstop aims to quadruple its store count from the current 2,500 locations, showcasing significant growth potential [7] - The company reported a 39% revenue increase in the latest quarter, surpassing its 10-year average growth rate of 26% [8] - Despite a nearly 30% decline in share price, Wingstop's revenue growth and profitability remain superior to peers like Chipotle Mexican Grill [10] Group 3: Zoetis - Zoetis is a leader in animal health with 15 product lines generating over $100 million annually, indicating strong diversification [12] - The company has seen its free cash flow quadruple over the last decade, with new osteoarthritis medicines for pets expected to drive further growth [13][14] - Investors who bought Zoetis shares in 2015 now enjoy a 4.6% yield on cost, highlighting the benefits of long-term investment in dividend growth stocks [16] Group 4: Dividend Growth Potential - ASML and Zoetis have increased dividends by 24% and 29% annually over the last decade, respectively, with current yields at 0.9% and 1% [16][17] - Wingstop has raised its dividends by 18% annually since 2017, with a current yield of 0.3% [17] - All three companies maintain a payout ratio below 33%, indicating room for future dividend increases [19]