Want to Grow a Passive Income Snowball? Buy These 7 Elite Dividend Growth Stocks.

by skolnes


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.

Wooden blocks arranged in a growth patten with the word passive written on the side.
Image source: Getty Images.

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.

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