These seven companies turn steady profits into growing passive income streams for investors.
Building passive income drives many investors toward dividend-paying stocks. Smart investors look beyond current returns to companies that consistently increase 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 characteristics. A conservative payout ratio ensures that 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.
Image source: Getty Images.
We examine seven companies that have proven their ability to grow dividends reliably over time. From retail giants to technology leaders, each brings something unique to an income-focused portfolio.
The building is coming back because of retail
TJX Company (TJX -0.33%)an operator of off-price retail stores including TJ Maxx, Marshalls and HomeGoods, offers an attractive dividend profile. The company has increased its dividend at an annual rate of 10.7% over the past five years, and a conservative payout ratio of 33.2% supports its current yield of 1.3%.
TJX trades at 26.3 times expected 2026 earnings, representing a premium to the S&P 500. The company benefits from its established sourcing network and the ability to offer branded merchandise at significant discounts.
The stable dividend operator of health
United Health Group (UNH 0.67%)America’s largest healthcare company by revenue, combines insurance services with its Optum healthcare delivery platform. The company’s dividend has grown at an annual rate of 14.2% over the past five years, with a current yield of 1.49% supported by a payout ratio of 51.7%.
At 16.5 times 2026 projected earnings, UnitedHealth trades at a discount to the S&P 500. The company’s integrated health model and significant scale are key strengths in the fiercely competitive health sector.
The increasing dividend power of software
Microsoft (MSFT 0.80%)a leader in cloud computing and enterprise software, demonstrates consistent dividend growth. The company has increased its dividend at an annual rate of 10.2% over the past five years, with its yield of 0.78% supported by a conservative payout ratio of 24.8%.
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.
Stable semiconductor yields
Texas Instruments (TXN 0.15%)a major producer of analog and integrated processing chips, offers an elite dividend program. The company has grown its dividend at an annual rate of 11% over the past five years, offering a yield of 2.7% with a payout ratio of 89%.
Texas Instruments shares trade at 28.4 times expected earnings in 2026, representing a significant premium to the S&P 500. Its focus on long-life semiconductor products serves a diverse customer base across multiple industries, giving to the company a solid foundation for future growth.
The growth of fuel of industrial gases
Linde (LIN -0.15%)a global leader in industrial and engineering gases, sports robust dividend growth. The company has increased its dividend at an annual rate of 13.9% over the past five years, with its yield of 1.16% supported by a modest payout ratio of 40.5%.
At 25.5 times 2026 projected earnings, Linde trades at a size premium to the S & P 500. That said, the company’s long-term customer contracts and high switching costs are significant obstacles to income, which provides solid justification for its premium valuation.
The scientific portfolio drives the returns
Danaher (DHR -1.05%)a developer of life sciences and diagnostic technology, is a proven commodity in the dividend growth game. The company has increased its dividend at an annual rate of 12% over the past five years, with its yield of 0.41% supported by a highly conservative payout ratio of 24.9%.
Danaher’s shares trade at 26.6 times 2026 earnings projections, which represent a heavy premium to the S & P 500. Its business model benefits from recurring revenue streams and a scientific depth in its markets.
The growth of the power of premium payments
American Express (AXP -0.97%)a leader in premium payment services, demonstrates reliable dividend growth. The company has increased its dividend at an annual rate of 11% over the past five years, with its yield of 1.03% supported by a conservative payout ratio of 19.8%.
Trading at just 15.8 times projected 2026 earnings, American Express offers an attractive entry point for long-term investors. The company’s closed network allows it to capture merchant fees and member spending data, while its premium cardholder base generates reliable revenue through annual fees and high transaction volumes. These competitive advantages help protect American Express’ high-powered dividend program.
American Express is an advertising partner of The Ascent, a Motley Fool company. George Budwell has positions at Microsoft. The Motley Fool has positions and recommends Danaher, Linde, Microsoft and Texas Instruments. The Motley Fool recommends Tjx Companies and UnitedHealth Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.