4 Dividend Raisers With Balance Sheets Strong Enough to Keep Raising Through Any Downturn
When profits dip, lenders get paid first and the dividend is usually what gets cut. Four household names have raised their payouts year after year, and one of them holds a credit rating almost no other U.S. company can match.
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A company with little debt pressure can keep raising its dividend through a downturn, because most of its cash flows through to owners after a small portion goes to lenders. A heavily indebted company has a harder choice when profits dip. Lenders get paid first, and the dividend is usually what gets cut. The four companies below have kept raising their payouts on schedule, and their balance sheets leave room to keep doing it.
The clearest example is Johnson & Johnson (NYSE: JNJ | JNJ Price Prediction), whose company profile describes it as one of only two U.S.-based companies with a prime credit rating of AAA. Yields across this group are modest. They offer a growing dividend, backed by cash flow that can pay for it.
ADP: Payroll Giant Behind a Double-Digit Dividend Raise
Automatic Data Processing (NASDAQ: ADP) runs payroll, HR, and benefits administration for 1.1 million clients and supports over 42 million workers. The stock yields 2.3%. That’s a modest starting point, but ADP makes up for it with larger raises.
The dividend record shows it. ADP raised its quarterly payment from $1.54 to $1.70 in a declaration dated November 12, 2025, an increase of about 10.4%. The year before, the payment rose from $1.40 to $1.54. Dividend records going back to 1999 show a quarterly payment of $0.07625 at that time. The last three raises were all declared in November, so the next decision is coming up soon.
Coverage is comfortable. The $6.80 annual dividend equals about 60% of trailing earnings of $11.28 per share. In fiscal 2026, ADP paid $2,626.3 million in dividends out of $5.44 billion in operating cash flow, about 48%. It also bought back $2,083.3 million of stock.
The balance sheet takes one line of explanation. Total liabilities of $58.36 billion look heavy next to $5.09 billion in equity, but ADP keeps client payroll money before paying it out. Average client fund balances were $36.9 billion last quarter, and that money earned $329.3 million in interest, up 15%. ADP also had $3.28 billion in cash.
The bull case is earnings growth. First-quarter fiscal 2027 adjusted EPS of $2.82 beat the $2.77 estimate, and management now expects adjusted EPS to grow 10% to 12% this fiscal year. The CFO said ADP’s investments set it up “to deliver sustainable revenue growth, margin expansion, and shareholder returns over time.”
Risk: interest income on client funds depends on interest rates. ADP forecasts $1.59 billion to $1.61 billion of it this year at an average yield of about 3.8%. Lower rates would shrink that income.
Johnson & Johnson: AAA Balance Sheet Backing 64 Years of Raises
Johnson & Johnson makes prescription drugs in oncology, immunology, and neuroscience, plus medical devices for surgery, cardiovascular care, and vision. It yields 1.98%, the lowest in this group, on a forward annual dividend of $5.36 per share.
Its dividend-raise record is the most consistent in this group. The board increased the quarterly dividend 3.1% from $1.30 to $1.34, which the company says marked 64 consecutive years of dividend increases. Dividend records confirm a higher quarterly payment in every year from 2002 through 2026. The next payment is scheduled for December 8, 2026.
Debt is manageable. The company ended the third quarter with approximately $17 billion in cash and marketable securities against approximately $45 billion of debt, for net debt of approximately $28 billion. It generated more than $6 billion of free cash flow in the quarter and expects $21 billion for the full year. At its current rate, the dividend uses about 61% of that guidance, or about 49% of the low end of adjusted EPS guidance of $11.05.
Management lists the dividend among its stated priorities. The CFO said capital allocation centers on investments that “increase our annual dividend, and strengthen our pipeline.”
The bull case is growth. TREMFYA sales rose 68.2%, and oncology grew roughly 17%. The company is on track to pass $100 billion in annual revenue and expects more detail on its 2027 outlook at a business review on December 8.
Risk: talc litigation. A proposed $5.5 billion ovarian talc resolution helped cut third-quarter diluted EPS to $0.09 from $2.12, and it raised the trailing P/E to 42. Settlements take cash that could otherwise fund raises.
Coca-Cola: Leverage Sitting Below Its Own Target
Beverage concentrates and syrups go to bottling partners worldwide through Coca-Cola (NYSE: KO), which also owns 32 billion-dollar brands. The stock yields 2.19%.
The quarterly dividend rose from $0.51 to $0.53 this year, up about 3.9%. Records show a higher quarterly payment every year from $0.28 in 2013 to today’s level, and earlier records back to 1999 show the same steady rise.
Coverage is solid. The trailing $2.10 dividend equals about 62% of trailing EPS of $3.39. The free cash flow target was raised to at least $13.0 billion, and the dividend at its current rate uses about 70% of that.
The balance sheet is in good shape for paying interest and dividends. The CFO said, “Our net debt leverage is 1.3 times EBITDA, which is below our target range of two to 2.5 times.” Interest coverage is 8.32, and cash was $13.45 billion at quarter end. He also said capital return is “primarily through our dividend.”
The bull case is volume. Third-quarter revenue of $13.38 billion rose 7.4%, unit case volume grew 5%, and Coca-Cola Zero Sugar grew 16%. Management expects comparable EPS growth of at least 11% this year.
Risk: Coca-Cola is waiting on a court decision in its IRS dispute, which the CFO expects “in the coming months.” He said the company is prepared for a best-case or worst-case result. A worst-case ruling would use up some of the room it has built.
Procter & Gamble: 70 Years of Raises Funded by Free Cash Flow
Procter & Gamble (NYSE: PG) sells household staples across five segments: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. It has the highest yield in this group at 2.65%.
The quarterly dividend rose from $1.0568 to $1.0885 in a declaration dated April 14, 2026, an increase of about 3.0%. The company says this is the 70th consecutive year of dividend increases and the 136th consecutive year of dividend payments. Dividend records confirm a raise in every year from 2019 through 2026, taking the quarterly payment from $0.7172 to its current level.
Cash more than covers the dividend. First-quarter free cash flow was $4.40 billion, up 4.6%, and dividends that quarter were $2.6 billion, about 59% of free cash flow. The forward dividend of $4.354 equals about 63% of the low end of core EPS guidance of $6.89. Fiscal 2026 free cash flow was $15.84 billion.
P&G has $15.37 billion in cash. Management expects about $300 million of higher after-tax net interest expense this year, with roughly $150 million of that tied to debt issued for recent acquisitions. That’s a small cost next to the company’s cash generation. P&G still plans to pay over $10 billion in dividends and buy back about $5B of stock this fiscal year.
The bull case is broad growth. Organic sales rose 4%, all five segments grew, and core EPS of $2.00 beat the $1.89 estimate. The CFO pointed to “a proven track record to fund growth via productivity.”
Risk: costs. Management expects about $1.4 billion in higher after-tax raw material, energy, and transportation costs. Core EPS growth guidance is just 0-3%, which points to modest raises in the near term.
Who These Four Dividend Raisers Suit Best
ADP, Johnson & Johnson, Coca-Cola and Procter & Gamble each have a verified record of raises, dividends covered by earnings and free cash flow, and debt their cash flow handles easily. Their yields run from 1.98% to 2.65%, so the return is a dividend that grows every year. These names suit retirees and pre-retirees who want a reliable, growing dividend and are willing to accept a lower starting yield. ADP’s raise decision, which has come in November each of the last three years, and Johnson & Johnson’s December business review are the next two events to watch.
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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.
