Shares of the $630 billion credit card company Visa (V 0.74%) may yield just 0.82% today, but if history is any guide, that number could climb in a hurry.
Since it began paying a dividend in August 2008, payouts have risen by 2,452%, to $0.67 per share each quarter. Anyone who put $1,000 into this company back then and held would be collecting $597 each year in dividends today. Of course, past performance is no guarantee of future results, but this growth is striking. If Visa can increase its payout at even half that rate, investors buying shares today will eventually enjoy a yield on cost of 11%, before any capital appreciation is taken into account.
NYSE: V
Key Data Points
So, can Visa keep increasing its dividend so prolifically? There are three reasons to think it can at least match its track record of dividend growth in the years ahead.
1. Visa has become a hyperscaler
In its most recent earnings call, Chief Executive Officer Ryan McInerney pointed to Visa's $258 billion in processed transactions for the 2025 fiscal year (ended Sept. 30), up 10% from the prior year. Because Visa earns a cut from nearly every transaction it facilitates (paid by its financial clients, not card users) Visa raked in $31.7 billion from service revenue and international transaction revenue in the 2025 fiscal year.
In the words of McInerney, "Visa has become a hyperscaler." Visa's network of payment networks now has about 12 billion endpoints, and its investments in a service stack offering cloud-ready microservices using open languages and technologies allows for easier scaling and faster deployment.
2. Operating cash flow covers the current dividend four times over
Visa's payout ratio, or the percentage of net income it uses to pay its dividend, is extremely low at 23%. For context, one of the most famous and well-regarded dividend stocks, Coca-Cola, currently shells out 67% of its net income cover its dividend.
But Visa's dividend is even stronger than its payout ratio makes it appear. With more than $23 billion in operating cash flow, it has that amount of money left over after paying all operating expenses from salaries, to electric bills, and all other expenses from core components of its business -- meaning this $23 billion can be used toward mergers and acquisitions, share repurchases, or dividends.
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With 1.93 billion shares outstanding, Visa is currently paying $5.17 billion a year in dividends. That's just 22% of its operating cash flow, and it means that Visa could double its dividend overnight and still have more than half of its cash flow from operations remaining.
3. A new $30 billion share buyback program
Last April, Visa revealed it had completed its old $20 billion share buyback program, retiring 13 million shares. It then launched a $30 billion share buyback program, which it took a major step toward making good on in Q4, when it bought back $4.9 billion in shares.
Share repurchases help a company's dividend growth prospects by reducing the share count toward which management must pay dividends. It's easier to sustain a dividend on 13 million fewer shares, and when this current buyback program concludes, dividend growth will be easier still. In the meantime, share buybacks have another silver lining for investors. They're inherently shareholder-friendly because they increase earnings per share by shrinking the denominator (share count) on which earnings per share is calculated.
The bottom line
Visa's robust earnings and revenue growth, combined with its huge share buyback program and entrenched industry position, make its future dividend hike likely to roughly match its past increases. A 0.82% yield will take a few years to compound into a meaningful income stream. But for medium- to long-term investors, this is an income stock that can't be ignored.
