Dividend stocks are everywhere, but many just downright stink. In some cases, the business model is in serious jeopardy, or the dividend itself isn't sustainable. In others, the dividend is so low, it's not even worth the paper your dividend check is printed on. A solid dividend strikes the right balance of growth, value, and sustainability.

Today we're going to look at one dividend-paying company that you can put in your portfolio for the long term without too much concern. This isn't to say that these stocks don't share the same macro risks that other companies have, but they are a step above your common grade of dividend stock. Check out the previous selection.

This week, we'll turn our attention to global payment processing giant Visa (V 0.19%), and we'll examine why this financial juggernaut's growing dividend could be an income investors' dream for years to come.

Source: Hakan Dahlstrom, Flickr.

Not without risks
You'd be hard-pressed to find pessimists in the payment processing sector at the moment, but that doesn't negate the fact that regulatory and economic risks do exist that could negatively affect Visa and its largest rival, MasterCard (MA 0.78%).

Perhaps the biggest risk for Visa and MasterCard relates to potential regulatory issues within the U.S. and around the globe. In the U.S., for example, the Dodd-Frank Act put a swift end to debit-card rewards for a number of consumers as a $0.21 swipe fee cap was to be put in place, capping payment processing facilitators' profits per swiped transaction. Although the Federal Reserve and U.S. district courts are still battling over the validity and scope of this swipe-fee cap, ongoing regulatory challenges for Visa and MasterCard clearly exist.

The other issue Visa and MasterCard needs to contend with is the ability to find growing economies. Considering that these are global companies, it shouldn't be too difficult to unearth strong growth in untapped markets, but ultimately Visa is very much tied to the results in some of the world's largest economic powerhouses. In other words, a global recession or a degradation in Americans' credit quality will negatively affect how much people charge on their credit card.

Charging ahead
As I said, Visa is not without its risks, but the rewards appear to significantly outweigh those perceived risks.

The biggest advantages that Visa can offer investors is easy access to global markets, a high barrier to entry, and a lack of debtor liability relative to its peers.

Source: U.S. Navy, Wikimedia Commons.

One reason Visa remains such an attractive investment is that it offers countless contracts with merchants around the globe. While it does generate a significant portion of its debit and credit gross dollar volume in North America and Europe, the underdeveloped regions of Africa and Southeastern Asia offer Visa a multi-decade opportunity to grow its top line by double digits annually.

Visa is also well protected by the fact that the barrier-to-entry into the payment processing facilitator business is extremely high. The investment in networking infrastructure, the millions of merchant partnerships that Visa has created, and the countless relationships with the world's largest financial institutions is something that none but a handful of companies could accomplish -- and certainly not overnight. This affords Visa a fair amount of protection from outside competition moving into its territory.

Finally -- and what might be my favorite investable aspect -- Visa and MasterCard are both solely payment facilitators on debit and card transactions and have no bearing on the credit quality of its consumers. In a different context, this means that if people suddenly start defaulting on their debts, lending institutions could be out of some money, but Visa and MasterCard have absolutely no liability.

This is potentially good or bad news for dual-threat financial-service providers such as American Express (AXP 1.53%) and Discover Financial Services (DFS 3.04%). When economic growth is robust and credit delinquencies are low, then American Express and Discover can actually outperform Visa and MasterCard by double-dipping on the processing and loan gains. In recessionary times, though, Visa and MasterCard can remain unaffected while AmEx and Discover may grapple with higher loan loss reserves tied to their loans, giving a company like Visa a more consistent edge.

Show me the money
The real reason we're taking a closer look at Visa today, though, is its growing dividend. Now I understand that many of you are going to look at Visa's $1.60 paid annually and scoff at the fact that this equates to just a 0.7% yield -- hardly anything to write home about. However, what you need to consider is that Visa has raised its dividend five times since going public in 2008 and it has the cash flow to easily keep raising its dividend for the foreseeable future.

Source: Nasdaq.com.

As you'll note from that chart, Visa boosted its dividend by 21% in October and has cumulatively increased its quarterly payout by nearly 300% in less than five years. If Visa were to keep up this torrid pace of dividend increases, it's quite plausible that shareholders could see $5 in annual payouts by as soon as 2018. With a payout ratio of just 18% and a double-digit growth rate, there's very little standing in the way of bigger dividends.