4 Industrial Dividend Kings Whose Streaks Survived Every Recession
Industrial manufacturers face collapsing orders every time the economy stumbles, yet four companies have kept raising their dividends through every recession on record, and the secrets behind those streaks reveal something counterintuitive about how they are built to survive.
Raising a dividend every year is easier for a grocery chain or a soap maker, because people keep buying those products in any economy. Industrial manufacturers have no such buffer. Orders for hydraulics, fasteners, valves, and pumps drop hard when factories go idle, so a long raise streak in this sector has to be built on purpose: conservative payout ratios, steady free cash flow, and balance sheets strong enough to keep raising the check while revenue falls. Parker-Hannifin (NYSE: PH | PH Price Prediction) has managed it for 70 consecutive fiscal years. A streak like that strongly suggests discipline, but it doesn’t guarantee the next raise, and several companies that once held half-century streaks have since cut or frozen their payouts. All four names below also pay modest yields. What they offer is a check that has kept growing through every downturn on record.
Parker-Hannifin: 70 Years of Raises Spanning the Financial Crisis and the Pandemic
Parker makes motion and control technologies: hydraulics, filtration and aerospace systems sold to industrial equipment makers and aircraft programs. Its streak runs 70 consecutive fiscal years, and the latest increase was 11%, taking the quarterly payment from $1.80 to $2.00. At $928.29, that works out to a yield of about 0.86%.
Coverage is excellent. The trailing dividend takes about 26% of earnings per share of $28.48. Parker paid nearly $1 billion in dividends against record free cash flow of $3.905 billion, and net debt to adjusted EBITDA came down to 1.4x.
The recession record shows how the company protected the streak. Through the 2008 to 2009 financial crisis, the quarterly rate stayed at $0.25 for every 2009 payment and then rose to $0.26 in 2010. During the 2020 pandemic recession, it held at $0.88 all year, then jumped to $1.03 in 2021. Because Parker counts its streak by fiscal year, it can hold the rate steady in a bad year and still keep the run alive.
Visibility drives the bullish thesis. Backlog reached a record $12.8 billion, and management guided fiscal 2027 adjusted EPS to $34.25 to $35.25.
Risk: Parker committed nearly $12 billion to the pending Filtration Group and CIRCOR aerospace deals. The chief executive said, “We might touch 3 with our leverage with these two deals. It will take us about 6 quarters to get that back down to 2.”
Illinois Tool Works: 63 Years of Increases, Including a Raise in 2009
Illinois Tool Works (NYSE: ITW) makes engineered fasteners and components, equipment and consumable systems, and specialty products. Its customers include automakers, builders, welders, and electronics manufacturers. The company just raised its dividend 7%, which management called “our 63rd consecutive year of dividend increases.” The new quarterly rate is $1.72, or $6.88 a year. At $290.05, the yield is about 2.37%, the highest in this group.
Cash backs the payout. Third-quarter free cash flow was $851 million, or 100% of net income, and the operating margin hit a quarterly record of 27.8%. ITW returned $2.7 billion to shareholders over the first nine months. Years of buybacks have left equity at only $3.142 billion, so the dividend depends on cash generation more than on balance sheet buffer.
In the financial crisis, ITW kept raising. It paid $0.28 per share in 2008 and $0.31 per share in 2009. In 2020, the rate rose from $1.07 to $1.14.
For the bull case, ITW raised full-year GAAP EPS guidance to $11.45 to $11.55, and management still targets 30% operating margins by 2030.
Risk: The trailing payout takes about 58% of EPS ($11.21), the most in this group. Automotive OEM and Construction Products are already soft, so a deeper slump there would eat into raise capacity faster than at its peers.
Emerson Electric: Raises Through 2008, 2009 and 2020, With Its Next Report This Week
Emerson Electric (NYSE: EMR) sells automation software, control systems, measurement instrumentation, valves, actuators, and safety solutions to energy, chemical, power and life sciences customers. Emerson’s Dividend King status is widely cited. The dividend record we checked goes back to 1999 and shows a higher quarterly rate every year since. The latest raise was 5%, to $0.555, declared with the fiscal fourth-quarter report. This year’s fourth-quarter results are due November 4. At $165.96, the yield is about 1.34%.
Coverage is comfortable. The trailing dividend takes about 48% of GAAP EPS of $4.57, and adjusted EPS is guided to about $6.55. Planned dividends of $1.2 billion sit against free cash flow guidance of about $3.6 billion, so dividends use about 33% of free cash flow. Cash on hand was $2.180 billion.
Emerson raised even in the worst quarters. Late in 2008, the rate went from $0.30 to $0.33, then to $0.335 in 2009. In 2020, it went from $0.50 to $0.505. The raises were small, but they never stopped.
Demand supports the bullish thesis. Backlog stood at $8.2 billion, underlying orders grew 7%, and the semiconductor vertical grew 53%.
Risk: Management said the “conflict in the Middle East remains fluid,” and the region had already weighed on sales earlier in the fiscal year.
Dover: 71 Consecutive Years of Higher Dividends and a $3 Billion Cushion
Dover (NYSE: DOV) makes equipment and components, consumable supplies, aftermarket parts for fueling and convenience retail, food equipment, refrigeration, industrial pumps, and marking and coding. Its board recently raised the quarterly dividend to $0.525 from $0.52, calling it “the 71st consecutive year in which the Company has increased its annual cash dividend.” At $215.91, the yield is about 0.97%.
No company here covers its dividend more easily. The payout takes about 23% of trailing EPS of $8.91. Free cash flow so far this year is $703 million, and the fourth quarter is historically Dover’s strongest for cash. The chief executive pointed to “over $3 billion of dry powder”.
Through the financial crisis, the record shows the rate rising from $0.20 to $0.25 in 2008 and to $0.26 in 2009. In 2020, it moved from $0.49 to $0.495.
Momentum supports the bullish thesis. Orders rose 16%, backlog is up 35%, and the chief executive said, “Our stance is now clearly on capital return.”
Risk: The latest increase was just $0.005 a share. Dover is keeping the streak alive with small raises while buybacks take priority, so income growth from this name will probably stay slow.
Who These Four Industrial Kings Suit Best
These four fit retirees and near-retirees who care more about a dividend that keeps rising through recessions than about a large starting check. Parker-Hannifin and Dover leave the widest safety margin, each paying out roughly a quarter of earnings. Illinois Tool Works pays the most income today, and Emerson sits in between with a large free cash flow buffer. For anyone building an income portfolio that has to get through the next downturn, all four have a record worth studying (we ranked ten Dividend Kings by valuation right now in a free report you can grab here).
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Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad, diverse career, including a stint as creative services director at an NBC affiliate in Austin, Texas, gives him unique insight into the financial industry.
Lee Jackson's journey in the financial industry spans more than 30 years, including nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career spanned pivotal sell-side Wall Street events, from the dot-com rise and bubble to the Long-Term Capital Management debacle, 9/11, and the Great Recession of 2008. This reflects his resilience and adaptability amid market volatility.
Lee Jackson’s practical financial industry experience, gained through a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing across various platforms. This unique combination allows him to shed light on the intricacies of Wall Street in a way only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.
Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.
