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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.

Building returns through retail

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.

Healthcare's steady dividend performer

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.

Software's rising dividend power

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.

Semiconductor steady returns

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.

Texas Instruments' shares trade at 28.4 times 2026 projected earnings, representing a significant premium to the S&P 500. Its focus on long-lifecycle semiconductor products serves a diverse customer base across multiple industries, giving the company a solid foundation for future growth.

Industrial gases fuel growth

Linde (NASDAQ: LIN), a global leader in industrial gases and engineering, sports robust dividend growth. The company has increased its dividend at a 13.9% annual rate over the past five years, with its 1.16% yield supported by a modest 40.5% payout ratio.

At 25.5 times 2026 projected earnings, Linde trades at a sizable premium to the S&P 500. That said, the company's long-term customer contracts and high switching costs are significant barriers to entry, providing a solid justification for its premium valuation.

Scientific portfolio drives returns

Danaher (NYSE: DHR), a life sciences and diagnostic technology developer, is a proven commodity in the dividend growth game. The company has increased its dividend at a 12% annual rate over the past five years, with its 0.41% yield supported by a highly conservative 24.9% payout ratio.

Danaher's stock trades at 26.6 times 2026 projected earnings, representing a hefty premium to the S&P 500. Its business model benefits from recurring revenue streams and deep scientific expertise across its markets.

Premium payments power growth

American Express (NYSE: AXP), a leader in premium payment services, demonstrates reliable dividend growth. The company has increased its dividend at an 11% annual rate over the past five years, with its 1.03% yield supported by a conservative 19.8% payout ratio.

Trading at just 15.8 times 2026 projected earnings, American Express offers an attractive entry point for long-term investors. The company's closed-loop 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.

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American Express is an advertising partner of The Ascent, a Motley Fool company. George Budwell has positions in Microsoft. The Motley Fool has positions in 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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.