McKesson (MCK) and Visa (V) Are 2 Dividend Growth Stocks to Buy For a Lifetime of Passive Income

Investing in dividend growth stocks is a smart, reliable way to build passive income that lasts a lifetime, and it’s worth considering if you’re eyeing financial freedom. These are companies that have a knack for raising payouts year after year. They don’t just toss you a check today, but grow it over time. 

If a company pays $1 per share now and hikes it 10% annually, that’s $2.59 in a decade and $6.73 in 20 years. The same stock, just bigger cash flows, and you haven’t done anything after your first purchase. Multiply that by dozens or hundreds of shares and you can be sitting pretty when you retire.

The beauty lies in the numbers. Historically, dividend growers in the S&P 500 have delivered 9.2% annual returns from 1972 to 2023, according to Hartford Funds, which found such stocks handily outpaced the returns of non-payers, which grew 3.9%. Why? They’re cash-rich, disciplined outfits that can weather storms and compound your gains.

If you reinvest those dividends, a $10,000 investment growing at 9% balloons to $23,67 4in 10 years and $56,044 in 20 versus $14,802 at 4% without growth.

It’s not flashy, but it’s steady. Now put it all together in a portfolio worth $500,000 that yields 3% and grows 7% annually, and it spits out $15,000 now or $40,000 in 15 years. That is enough to cover basic expenses without touching any principal. 

Risks like dividend cuts exist, but blue-chip growers like the two stocks below rarely falter. Start early, stay patient, and you’ve got a passive, money-making machine for life.

McKesson (MCK)

Pharmaceutical drug wholesaler McKesson (NYSE:MCK) is the first dividend growth stock to consider as part of your passive income portfolio. This healthcare giant has a penchant for rewarding shareholders, and its recent performance only strengthens the case. 

Based on its recent fiscal third quarter results, McKesson continues to flex its muscle in pharmaceutical distribution and oncology solutions, key areas driving steady cash flow. That reliability translates into a rock-solid foundation for dividends, which is exactly what you want for long-term passive income.

What sets McKesson apart is its history of consistent dividend hikes. For nearly two decades, it has bumped up payouts without fail, most recently in January 2025, which was its 18th straight year of increases. It has raised its payout at a 12% compounded annual growth rate (CAGR) for the past decade. The dividend yields 0.4% annually.

That’s no fluke. It’s a sign of a company confident in its earnings power and committed to sharing the wealth. Even with tariff talks swirling and healthcare costs under scrutiny, McKesson’s broad reach, including partnerships with pharmacies and specialty care providers, keeps it humming. 

Although McKesson has reported negative free cash flow of $2.2 billion through the first nine months of the fiscal year, that’s due to the cost of onboarding new customers, such as its recent acquisition of PRISM Vision Holdings and Flordia Cancer Specialists before that. It will likely turn positive again by the end of Q4.

For a stock that’s proven it can grow dividends through thick and thin, MCK stock is a buy that promises stability and upside.

Visa (V)

The second dividend growth stock that’s built to last and provide a lifetime of passive income is Visa (NYSE:V). The payment processing titan has been firing on all cylinders lately, and its recent performance show Visa is a cash machine. It is handling more transactions globally than ever, especially in digital and cross-border payments, offering the kind of steady growth that keeps rewarding shareholders, which is what you want in a dividend growth stock.

Visa’s dividend history is a big draw. It has hiked payouts every year for over 15 years, with the most recent increase announced in late 2024. More importantly, it has raised its dividend at a 15% CAGR  for the past five years and nearly 20% over the past decade. The dividend currently yields just under 1% annually.

Fueled by the 4.6 billion cards in circulation, it processed $13.2 trillion in transactions last year, meaning it is a business that thrives on every swipe, tap, or click of a Visa card. While a recession could slow growth some, Visa isn’t a lender so it is immune from any defaults by borrowers that might occur that could affect banks. In past downturns, digital payments spiked. In 2020 for example, transactions grew 20%. And Visa’s $20 billion cash pile can provide a cushion in a downturn.

For investors eyeing passive income that grows, Visa’s a buy. Its ability to boost dividends year after year, tied to a granite-like foundation, makes V stock the single best stock to buy today.

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