Building passive income drives many investors toward dividend-paying stocks. Smart investors look beyond current yields to companies that consistently raise their payouts year after year, allowing a modest initial investment to grow into a substantial income stream over time.
The most successful dividend growers share three essential traits. A conservative payout ratio ensures the dividend remains sustainable through various business cycles. A history of annual increases demonstrates financial strength and a commitment to shareholders. Strong business fundamentals protect the cash flows that fund these growing payments.
Let’s examine seven companies that have demonstrated their ability to grow dividends reliably over time. From retail giants to tech leaders, each brings something unique to an income-focused portfolio.
TJX Companies (NYSE: TJX), an operator of off-price retail stores including T.J. Maxx, Marshalls, and HomeGoods, offers an attractive dividend profile. The company has increased its dividend at a 10.7% annual rate over the past five years, and a conservative 33.2% payout ratio supports its current 1.3% yield.
TJX trades at 26.3 times 2026 projected earnings, representing a premium to the S&P 500. The company benefits from its established sourcing network and ability to offer branded merchandise at significant discounts.
UnitedHealth Group (NYSE: UNH), America’s largest healthcare company by revenue, combines insurance services with its Optum healthcare delivery platform. The company’s dividend has grown at a 14.2% annual rate over the past five years, with a current yield of 1.49% supported by a 51.7% payout ratio.
At 16.5 times 2026 projected earnings, UnitedHealth trades at a discount to the S&P 500. The company’s integrated healthcare model and significant scale are key strengths in the fiercely competitive healthcare sector.
Microsoft (NASDAQ: MSFT), a leader in cloud computing and enterprise software, demonstrates consistent dividend growth. The company has increased its dividend at a 10.2% annual rate over the past five years, with its 0.78% yield supported by a conservative 24.8% payout ratio.
Microsoft trades at 28.2 times 2026 projected earnings, representing a premium to the S&P 500. The company’s cloud platform, Azure, and enterprise software generate substantial recurring revenue.
Texas Instruments (NASDAQ: TXN), a major producer of analog and embedded processing chips, offers an elite dividend program. The company has grown its dividend at an 11% annual rate over the past five years, offering a noteworthy 2.7% yield with an 89% payout ratio.
