Want Reliable Income? These 5 Stocks Have Raised Their Dividend Over the Last 4 Recessions.

The stock market is a great way to build long-term wealth. With countless approaches available, navigating the world of investing can feel overwhelming.

But one method that stands out is buying shares of dividend-paying companies, which -- over lengthy periods -- have consistently outperformed peers that don't pay dividends.

A study by Hartford Funds showed that, over a 50-year span ending in 2023 -- a period covering the last four recessions -- dividend-paying stocks have delivered an annual return of 9.17%; stocks without dividends delivered 4.27% in comparison. Furthermore, dividend payers exhibit less volatility than their counterparts, making them an appealing choice for those seeking stability alongside growth.

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A deeper dive into the report, titled The Power of Dividends: Past, Present, and Future, shows that companies that raise or initiate dividends perform even better, delivering 10.2% annually with even less volatility.

If you're looking for income and solid long-term returns, here are five excellent dividend stocks that have raised their dividends over the past four recessions or longer.

S&P Global

S&P Global (NYSE: SPGI) plays an important role in credit markets, assessing the creditworthiness of companies, governments, or other entities.

It enjoys a massive competitive advantage because credit-rating agencies have long-established reputations. And stringent regulatory barriers make it difficult for newer entrants to break into the space. For that reason, S&P Global dominates the credit-rating market with a 50% share.

On top of its ratings business, it also has a data and analytics business that provides steady cash flow. Its diverse income base and long history of cash management have made S&P Global a reliable dividend payer that has increased its annual payout over each of the last 52 years.

Cincinnati Financial

Cincinnati Financial (NASDAQ: CINF) benefits from steady demand for its insurance products and has been able to grow alongside the expanding economy. Thanks to the insurer's pricing power, it can also adapt to inflationary pressures like those in the past few years.

The company benefits from higher interest rates because insurers invest their cash in safer fixed-income investments with higher yields (relative to the 2010s decade), which helps it produce higher income. Last year's investment income of $894 million was up 21% compared to 2021.

Its pricing power and growth in different market environments are why the company has managed to grow its dividend annually over the last 64 years (across nine recessions), making it another excellent dividend stock you can count on.

Automatic Data Processing

Many companies choose Automatic Data Processing (NASDAQ: ADP), better known as ADP, to manage their human resources, payroll, talent management, time tracking, tax payments, and benefits administration.

The company has a vast global presence, providing payroll services to 42 million employees for over 1.1 million clients across 140 countries, and its reputation for service gives it a deep economic moat as a result.

Thanks to its strong client retention, ADP enjoys a steady stream of income, which has enabled it to raise its payout for 50 consecutive years. That recent dividend hike makes it the newest member of the coveted Dividend Kings club.

Chevron and ExxonMobil

Chevron (NYSE: CVX) and ExxonMobil (NYSE: XOM) are key players in the oil and gas industry, making them vulnerable to swings in crude oil and natural gas prices.

To help smooth out their earnings, Chevron and Exxon operate across the value chain, from exploring and producing oil and natural gas (upstream), to transporting products via pipelines (midstream), to refining crude oil into fuel and petrochemicals (downstream).

The demand for oil and gas isn't fading anytime soon. The International Energy Agency predicts oil demand will continue to rise through 2030 to over 2.6 million barrels per day.

For investors looking for energy exposure and a reliable payout, Chevron has 37 consecutive years of dividend increases, and ExxonMobil has 42, making both solid choices.

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*Stock Advisor returns as of November 4, 2024

Courtney Carlsen has positions in Chevron and ExxonMobil. The Motley Fool has positions in and recommends Chevron and S&P Global. The Motley Fool has a disclosure policy.