Yielding Less Than 1%, Is Visa (V) Still a Good Dividend Stock?

With a yield of only 0.8%, it may seem strange to discuss Visa (V) as an exciting dividend stock, or one that would really be of interest to dividend investors, for that matter. But there’s more to dividend investing than just yield. I’m bullish on V stock because of its dividend growth, strong return profile, and resilient business model, all of which combine to make it a great option for dividend growth investors. 

Significant Growth  

While Visa’s yield is under 1%, it is building up a consistent track record as a strong dividend growth stock, which is why I remain bullish on this security. Not only has Visa paid a dividend to investors for the past 16 years in a row, it has also increased the amount of this payout for 16 consecutive years. 

Furthermore, it has grown the dividend at an impressive 15.4% compound annual growth rate (CAGR) over the past five years. Visa also features a conservative dividend payout ratio of 21.4%, so there’s no reason to believe that the company will have any need to cut or reduce the size of its dividend payment. In fact, Visa has plenty of runway to continue growing its dividend in the years to come. 

With this type of consistency and the pace at which Visa is growing its dividend, investors buying the stock today will likely enjoy a far better yield-on-cost in the future. In addition to its dividend, Visa is also returning capital to shareholders via share buybacks, which have recently accelerated. The company repurchased an impressive $5.8 billion worth of shares during the most recent quarter, bringing its annual total to $16.7 billion.

Visa’s Excellent Returns 

Visa is also a compelling option for dividend investors because of its excellent track record of delivering phenomenal total returns to shareholders. Over the past 10 years, Visa has delivered a total return of 414.9%. An investor who put $10,000 into the stock 10 years ago would have a stake worth $51,490 today, generating significant long-term wealth for investors. These strong returns beat those of the broader market over the same time frame.

For example, the Vanguard S&P 500 ETF (VOO) delivered a 244.9% total return as of the same date. An investor who put $10,000 into the broader market would have an investment worth $34,490 today, which is still a nice return but lags that of Visa. This example illustrates why Visa should be under consideration by dividend investors. While its yield may be lower, it has helped investors to grow their money more than five times over the past decade, a tradeoff most dividend investors would gladly take. 

Individual investors have their own goals and priorities. If you are an investor who wants or needs to live off of your dividend income, a low-yielding dividend stock like Visa may not be the ideal choice. But if you have a longer time horizon and want to potentially benefit from a strong total return from a combination of capital appreciation and dividend payments, a strong dividend growth stock could be a nice addition to a portfolio. As one can see in the chart below, V stock has gained 22% this year.

Crucial to the Global Economy 

Another attractive aspect of Visa for dividend investors is the simple fact that it isn’t going away any time soon. In fact, the global payment network’s business looks likely to get stronger in years to come as the use of credit and debit cards grows worldwide. There are over 4.5 billion Visa credit cards in use worldwide, and during the most recent quarter, the company processed an astonishing $16 trillion in payments volume.  

The long-term resilience of this business model also adds to Visa’s appeal as a dividend stock. Unlike some high-yielding dividend stocks which pay large dividends but face uncertain futures (which is part of what led to these high yields in the first place), dividend investors can be reasonably confident that Visa will not just survive, but thrive, going forward. 

Visa’s Valuation 

With a forward price-to-earnings multiple of 27.8 times consensus September 2025 earnings, Visa trades at a comparable valuation to the S&P 500 (SPX) index, which currently trades at 27.87 times future earnings estimates.

However, this is only slightly above that of the broader market, which seems reasonable for a blue-chip company like Visa that runs a high-quality business and has a long track record of generating excellent returns for investors.   

Is V Stock a Buy?

Turning to Wall Street, Visa stock has a Moderate Buy consensus rating based on 23 Buy, five Hold, and one Sell ratings assigned in the past three months. The average V stock price target of $314.09 implies 1.4% upside potential from current levels.

Read more analyst ratings on V stock

Conclusion: Look Beyond the Yield 

Visa’s low yield of 0.8% may not sound very compelling. But looking beyond the yield shows that Visa is an attractive option for dividend growth investors. I’m bullish on Visa as a top dividend growth stock based on its consistent track record of paying and raising its dividend payout, the fast pace at which it has been growing its dividend payout in recent years, and its conservative payout ratio. 

I’m also bullish on Visa based on the phenomenal total returns it has generated for shareholders over the years, easily outpacing the broader market. While Visa’s current yield is low, its dividend growth and its strong track record of total returns mean that it can help investors to grow their dividend income, as well as the size of their portfolios, over time.

Disclosure