Does Dover Corp. (DOV) Have a Long Runway for Growth?

Diamond Hill Capital, an investment management company, released its “Large Cap Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their upward momentum in Q4, with the Russell 1000 Value Index increasing 3.8%. The information technology (+11%) and communication services (+9%) sectors are leading the rally, driven by AI optimism. The growth areas of the market accounted for the majority of the Index’s return in Q4. The firm maintains a cautious stance toward AI-driven market enthusiasm and believes that, fundamentally stable, high-quality, cash-generative businesses present attractive opportunities. Against this backdrop, the Fund returned 1.41% in the quarter, lagging the Russell 1000 Value Index’s 3.8% return. In addition, you can check the Fund's top five holdings to see its best picks for 2025.

In its fourth-quarter 2025 investor letter, Diamond Hill Large Cap Fund highlighted Dover Corporation (NYSE:DOV) as a new addition. Dover Corporation (NYSE:DOV) is a leading diversified industrial company. On February 2, 2026, Dover Corporation (NYSE:DOV) stock closed at $207.32 per share. Dover Corporation (NYSE:DOV) delivered a 1.88% return in the past month, and its shares are up 2.17% over the past twelve months. Dover Corporation (NYSE:DOV) has a market capitalization of $28.435 billion.

Diamond Hill Large Cap Fund stated the following regarding Dover Corporation (NYSE:DOV) in its fourth quarter 2025 investor letter:

"Diversified industrial conglomerate Dover Corporation (NYSE:DOV) is in the middle of an underappreciated transition from a merger-and acquisition-focused holding company to a more execution focused operating company, which we believe creates a long runway for continued margin expansion. Furthermore, recent portfolio moves have increased its exposure to higher growth end markets, and after several years of sluggish growth, various cyclical headwinds seem likely to subside. We initiated a position with the stock trading at a significant discount to our estimate of its intrinsic value."

Dover Corporation (NYSE:DOV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 55 hedge fund portfolios held Dover Corporation (NYSE:DOV) at the end of the third quarter, up from 47 in the previous quarter. While we acknowledge the potential of Dover Corporation (NYSE:DOV) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Dover Corporation (NYSE:DOV) and shared a list of stock Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.