Investors have navigated turbulent markets so far in 2025. On April 2, President Donald Trump announced reciprocal tariffs on 180 countries worldwide, sending shock waves through the market. The fall further extended the decline of the S&P 500, which is down 15% since its all-time high on Feb. 19.
Recession fears are returning, and recent market volatility has caused some investors to rethink their investments. In this challenging environment, dividend stocks are worthy of consideration. However, not all dividend stocks are created equal. Certain companies possess robust competitive advantages that enable them to thrive across economic cycles.
Here are two high-quality companies that have consistently raised their dividend payouts over the past six recessions and delivered stellar returns for investors along the way.
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RLI Corp.: 50 consecutive years of dividend raises
When seeking stability, perhaps no industry is better than insurance. Companies in the space enjoy steady demand across business cycles. They can also raise rates and adjust to inflationary pressures in the economy. Finally, certain companies exhibit excellent underwriting thanks to a long history of expertise, resulting in a long history of growing dividend payouts and stock price appreciation.
RLI (RLI -5.04%) is an excellent example of how investing in a stable, steady business rewards long-term investors. The specialty insurance company operates in niche markets, focusing primarily on the excess and surplus (E&S) insurance markets.
RLI’s largest offerings are in the commercial excess and personal umbrella space. Its commercial excess policies are ideal for businesses that need higher liability limits than their primary policies provide and can cover risks like property damage, bodily injury, and legal expenses.
The personal umbrella business provides homeowners’ and automotive liability coverage above what traditional policies provide. This helps protect customers against significant losses and is typically used by high-net-worth individuals as an added layer of protection.
As a specialty insurer, RLI can be more selective about the risks it chooses to cover and how much it charges. Its policies are tailor-made for businesses or individuals and aren’t subject to the strict regulatory requirements that traditional property and casualty insurers face. As a result, companies are rewarded for their expertise and experience in covering hard-to-place risks and can enjoy higher profit margins in the process.
RLI has displayed excellent underwriting ability and a sound business model. The company has raised its dividend payout for over 50 consecutive years. Over the same period, it has delivered total returns (including reinvested dividends) of 16.8% annually, crushing the broader market along the way.
S&P Global: 53 consecutive years of dividend raises
S&P Global (SPGI -7.75%) plays an essential role in credit markets, evaluating the creditworthiness of entities and assigning them credit ratings. These ratings are important risk indicators influencing borrowing costs and investment decisions. For example, they are used to determine whether a company’s bonds are investment-grade or junk bonds.
What makes S&P Global a solid business is its industry. Breaking into credit ratings is not easy. High regulatory burdens and decades of built-up trust with investors make it difficult for new entrants to gain a foothold in the industry. As a result, S&P Global dominates the market with a 50% market share. Moody’s is the second largest player, with a 32% market share.
S&P Global benefits from the ongoing issuance of debt. Countries constantly raise debt to fund their expenditures, and companies raise debt to fund their businesses, make acquisitions, or for other purposes. As the economy expands, S&P Global benefits as we generally see higher debt issuance activity.
That said, S&P Global’s primary revenue is vulnerable to pullbacks in borrowing activity. For example, in 2022, higher interest rates kept many companies on the sideline, and issuance activity dropped. S&P Global balances some of this cyclical risk with its data analytics segment.
Through this, S&P Global provides data and analytics to finance professionals, market data to financial institutions, and software solutions for customers to manage and analyze data. Many of these are contractual agreements with subscription revenues, providing stability across economic cycles.
The company has displayed a solid operating model that has withstood the ups and downs of markets. That’s why it has raised its payout an impressive 53 years in a row. The dividend is modest, at 0.8%. However, when you factor in its dividend along with stock price appreciation, S&P Global has delivered investors a stellar 14% annually — making it another excellent choice for investors looking for cash flow and stability in this turbulent market.
