When it comes to assessing dividend-paying stocks, I think it makes sense to not only look at how much they pay shareholders today, but also the company's track record when it comes to increasing its dividend payments. Additionally, it's worth looking at how effective the company has been at growing its free cash flow over time, as this can provide investors with insight into how likely it is the company will continue to deliver dividend raises in the future.

In this column, I'd like to go over two chip companies that not only pay out respectable dividends, but whose dividends have been growing and look set to rise in the coming years: Texas Instruments (NASDAQ:TXN) and Broadcom (NASDAQ:AVGO).

Illustrations of Texas Instruments chips.

Image source: Texas Instruments.

Texas Instruments gives it all back

Texas Instruments' stated capital return policy is to funnel all of the free cash flow it generates into both dividend payments as well as share repurchases. As you can see in the chart below, the company's dividend payments and share count are each heading in the right direction -- up and down, respectively.

TXN Dividend Chart

TXN Dividend data by YCharts.

It's also worth noting that the company's generous capital return policy doesn't mean it has no growth ambitions. In fact, over the last five years (on a trailing-12-month basis), Texas Instruments' revenue is up almost 29%, while its free-cash-flow growth has surged nearly 100%.

TXN Free Cash Flow (TTM) Chart

TXN Free Cash Flow (TTM) data by YCharts.

Indeed, while the company's significant share repurchase activity can help increase free cash flow per share for a given amount of free cash flow, it's also important that the company try to make business decisions that lead to consistent and sustainable free cash flow increases. Texas Instruments' track record speaks to its ability to do that. (Texas Instruments says on its investor relations website that its free cash flow has grown at an 8% compounded annual rate since 2004.)

On Sept. 20, Texas Instruments announced that it had bumped its quarterly dividend from $0.62 per share to $0.77 per share -- a nearly 24.2% jump. On top of that, the company announced that it had tacked on another $12 billion to its share repurchase program, which it said "is in addition to approximately $7.4 billion of previously authorized repurchases that remained at the end of June 2018." 

Texas Instruments looks like a solid dividend growth stock thanks to its growing free-cash-flow generation and its generous capital return policy. Although nobody knows what the future will hold, I'd be willing to bet that Texas Instruments will continue to increase its dividends for a long time to come.

Broadcom is generous, too

Another company that pays a generous dividend today and looks set to keep growing that dividend in time is chip giant Broadcom. 

Today, the company pays a quarterly dividend of $1.75 per share, which works out to $7.00 per share on an annual basis. That's works out to a dividend yield of about 2.85% -- a respectable amount.

The company's dividend policy, which CFO Tom Krause explained on the company's most recent earnings call, is to give back "50% of our prior fiscal year free cash flow to shareholders in the form of cash dividends."

This means the company is sharing its success with its shareholders -- as its free cash flow grows, so too should the amount of cash it puts into their brokerage accounts over time.

Krause also said on the company's Sept. 6 earnings call that it expects to deliver "another substantial increase in the quarterly dividend for calendar [year] 2019" based on the company's "fourth quarter outlook and expected full fiscal year [2018] results." (You can see in the chart below that Broadcom's free cash flow has continued to grow nicely.)

AVGO Free Cash Flow (TTM) Chart

AVGO Free Cash Flow (TTM) data by YCharts.

The key thing to take away, though, is that Broadcom is a well-run business that has a proven track record of -- through a combination of organic efforts as well as through acquisitions -- delivering revenue and free cash flow growth to its shareholders.

Although investors shouldn't bet on huge dividend increases every year -- in fact, analysts expect Broadcom's earnings-per-share growth to be about 4.4% in its fiscal year 2019, much slower than the nearly 28.4% they're expecting this year -- the odds look good that the company's dividend will continue to trend up and to the right for the foreseeable future.

Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom Ltd. The Motley Fool has a disclosure policy.