Desiring Durable Passive Income During an Economic Downturn? These Elite Dividend Stocks Have Hiked Their Payouts In Each of the Last 4 Recessions.
Economic forecasters are raising the odds that we could experience a recession in the coming quarters. Goldman Sachs has hiked its recession probability a few times in recent weeks, bumping it from 20% all the way to 45%. Meanwhile, JPMorgan is even more bearish. Its recession model sees a nearly 80% chance the economy goes into a recession, up from 60% not long ago.
Recessions tend to cause corporate profits to decline, which drives many companies to cut costs through layoffs and other initiatives. Some companies will even cut or suspend their dividend payments to shareholders to conserve cash.
However, other companies are more recession-resistant due to the durability of their cash flows and the strength of their balance sheets. ExxonMobil (NYSE: XOM) and Coca-Cola (NYSE: KO) have proven their ability to weather recessions over the decades. They've both increased their dividends throughout at least the past four recessions. There's a good chance they can withstand the next one with similar ease.
ExxonMobil hiked its dividend payment by 4% earlier this year, extending its streak to 42 years of annual payment increases. "We're proud of the fact that we've increased our annual dividend per share for 42 years in a row, something only 4% of S&P 500 companies can claim," stated CFO Kathy Mikells during the oil giant's fourth-quarter earnings conference call. She continued, "And we plan for that track record to continue for decades to come, which is only possible by investing in the high-quality growth opportunities that drive leading returns and higher cash flows."
The energy company has been investing heavily in transforming its business to dramatically improve its underlying earnings power while also expanding into lower-carbon energy. This strategy has boosted its earnings capacity by nearly $14 billion over the past five years on a constant price and margin basis. Exxon plans to invest over $140 billion into major capital projects and its Permian Basin development program through 2030, which, along with structural cost savings, should add another $20 billion to its annual earnings capacity.
That incremental income will give Exxon even more fuel to grow its dividend, which is already on an incredibly safe foundation. Last year, Exxon produced $34.4 billion in free cash flow, easily covering its $16.7 billion dividend outlay. Meanwhile, it has a fortress balance sheet with an ultra-low 6% leverage ratio and a massive $23.2 billion cash balance. These factors put the oil giant's 3.8%-yielding dividend on a rock-solid foundation that should continue withstanding recessions.
Coca-Cola boosted its dividend payment by 5.2% earlier this year. That extended its dividend growth streak to 63 straight years. That raise kept Coca-Cola in the ultra-elite group of Dividend Kings, companies with 50 or more years of annual dividend increases.
The company has benefited from the durable and growing demand for its beverage brands. Its portfolio features multiple billion-dollar brands that generate lots of free cash flow for the company. Coca-Cola expects to produce $9.5 billion in free cash flow this year, more than enough to cover its dividend outlay ($8.4 billion last year). The company also has a strong cash-rich balance sheet ($12.9 billion of cash, cash equivalents, and short-term investments) with leverage at the low end of its target range.
Coca-Cola's long-term target is to organically grow its revenue by 4%-6% annually, which should drive mid-to-high single-digit earnings-per-share growth. Meanwhile, the company can enhance its growth rate by making accretive acquisitions. That puts it in a strong position to continue increasing its 2.9%-yielding dividend.
Exxon and Coca-Cola have increased their dividends every year for several decades, which includes the last four recessions. They're in excellent positions to continue raising their payout during the next downturn, whether that happens later this year or further in the future. Because of that, they're great dividend stocks to buy for a durable passive income stream.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Matt DiLallo has positions in Coca-Cola and JPMorgan Chase. The Motley Fool has positions in and recommends Goldman Sachs Group and JPMorgan Chase. The Motley Fool has a disclosure policy.
Desiring Durable Passive Income During an Economic Downturn? These Elite Dividend Stocks Have Hiked Their Payouts In Each of the Last 4 Recessions. was originally published by The Motley Fool

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AMPHENOL CORPORATION ANNOUNCES PRICING OF EURO-DENOMINATED SENIOR NOTES OFFERING
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Therefore, it is possible that the Euro Notes Offering is completed and the USD Notes Offering is not completed. The Company intends to use the net proceeds from the Euro Notes Offering and the USD Notes Offering to repay borrowings under the Company's U.S. commercial paper program and for general corporate purposes. BNP PARIBAS, Citigroup Global Markets Limited and Commerzbank Aktiengesellschaft are serving as the joint book-running managers for the Euro Notes Offering. The Euro Notes are being offered pursuant to the Company's effective shelf registration statement on file with the Securities and Exchange Commission (the "SEC"). A prospectus supplement describing the terms of this offering will be filed with the SEC. Copies of the prospectus supplement and accompanying prospectus for the offering may be obtained from BNP PARIBAS toll-free at 1-800-854-5674, Citigroup Global Markets Limited toll-free at 1-800-831-9146 and Commerzbank Aktiengesellschaft toll-free at 1-800-233-9164. This press release does not constitute an offer to sell or the solicitation of an offer to buy the Euro Notes, nor will there be any sale of the Euro Notes, in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offer, solicitation or sale of the Euro Notes will be made only by means of the prospectus supplement and the accompanying prospectus. About AmphenolAmphenol Corporation is one of the world's largest designers, manufacturers and marketers of electrical, electronic and fiber optic connectors and interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. Amphenol designs, manufactures and assembles its products at facilities in approximately 40 countries around the world and sells its products through its own global sales force, independent representatives and a global network of electronics distributors. Amphenol has a diversified presence as a leader in high-growth areas of the interconnect market including: Automotive, Commercial Aerospace, Communications Networks, Defense, Industrial, Information Technology and Data Communications and Mobile Devices. For more information, visit Forward-Looking StatementsStatements in this press release which are other than historical facts are intended to be "forward-looking statements" within the meaning of the Securities Exchange Act of 1934, as amended, the Private Securities Litigation Reform Act of 1995 and other related laws. While the Company believes such statements are reasonable, the actual results and effects could differ materially from those currently anticipated. Details regarding various significant risks and uncertainties that may affect our operating and financial performance can be found in the Company's latest Annual Report on Form 10-K and the Company's subsequent filings with the Securities and Exchange Commission, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. Prohibition of Sales to EEA Retail InvestorsThe Euro Notes are not intended to be offered, sold or otherwise made available, and should not be offered, sold or otherwise made available, to any retail investor in the European Economic Area (the "EEA"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the "Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (as amended, the "Prospectus Regulation"). Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Euro Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Euro Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation. United KingdomThe communication of this announcement, the prospectus supplement, the accompanying prospectus, any related free writing prospectus and any other document or materials relating to the issue of the Euro Notes is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the United Kingdom's Financial Services and Markets Act 2000 (as amended, the "FSMA"). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom ("UK"). The communication of such documents and/or materials is only being made to (i) persons outside the UK; (ii) and those persons in the UK (A) who have professional experience in matters relating to investments who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order")); or (B) who are high net worth companies, and other persons to whom they may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Financial Promotion Order, (all such persons together being referred to as "relevant persons"). In the UK, this announcement, the prospectus supplement, the accompanying prospectus and the Euro Notes offered hereby are only available to, and any investment or investment activity to which this announcement, the prospectus supplement, the accompanying prospectus, any related free writing prospectus or any other document or materials relating to the issue of the Euro Notes relates will be engaged in only with, relevant persons. Any person in the UK that is not a relevant person should not act or rely on this announcement, the prospectus supplement, the accompanying prospectus, any related free writing prospectus or any other document or materials relating to the issue of the Euro Notes or any of their contents. Prohibition of Sales to UK Retail InvestorsThe Euro Notes are not intended to be offered, sold or otherwise made available, and should not be offered, sold or otherwise made available, to any retail investor in the UK. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended, the "EUWA"); (ii) a customer within the meaning of the provisions of FSMA and any rules or regulations made under the FSMA to implement the Insurance Distribution Directive, where that customer would not qualify as a professional client as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of the Prospectus Regulation as it forms part of domestic law by virtue of the EUWA (the "UK Prospectus Regulation"). Consequently, no key information document required by the PRIIPs Regulation as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the Euro Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the Euro Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation. UK MIFIR product governance / Professional Investors and ECPs Only Target MarketSolely for the purposes of each manufacturer's product approval process, the target market assessment in respect of the Euro Notes has led to the conclusion that: (i) the target market for the Euro Notes is only eligible counterparties as defined in the FCA Handbook Conduct of Business Sourcebook ("COBS"), and professional clients, as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("UK MiFIR"); and (ii) all channels for distribution of the Euro Notes to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Euro Notes (a "distributor") should take into consideration the manufacturers' target market assessment; however, a distributor subject to the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK MiFIR Product Governance Rules") is responsible for undertaking its own target market assessment in respect of the Euro Notes (by either adopting or refining the manufacturers' target market assessment) and determining appropriate distribution channels. View source version on Contacts Sherri ScribnerVice President, Strategy and Investor Relations203-265-8820IR@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Trump's first term shows why markets are cautious on the China trade deal
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Trading Day-Good vibrations turn sour
By Jamie McGeever ORLANDO, Florida (Reuters) - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist I'm excited to announce that I'm now part of Reuters Open Interest (ROI), an essential new source for data-driven, expert commentary on market and economic trends. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. The US and China have reached a trade deal, or at least agreed on the framework of a deal, which together with surprisingly soft U.S. inflation data, gave markets a lift on Wednesday. But Wall Street's gains were mild, and they were later wiped out by rising tensions in the Middle East. In my column today I look at the 'equity risk premium' and other metrics that suggest relative U.S. equity and bond valuations are getting very stretched. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. 1. China's latest trade truce with US leaves investors nonethe wiser 2. Dollar keeps losing market share but euro slow tobenefit: ECB study 3. US importers turn to brokers to navigate Trump-eratariffs, at a cost 4. When it comes to a US debt default, never say never 5. No longer the big outlier, Italy sees bond renaissance:Mike Dolan Today's Key Market Moves * Wall Street ends in the red, having earlier hit highslast seen in February-March. The S&P 500 falls 0.3%, the Nasdaqloses 0.5%. Consumer cyclicals sector falls 1%, and energy isthe best-performing sector up 1.5%. * U.S. stock market volatility, as measured by the VIXindex, falls to its lowest in almost four months earlier in theday. * Treasuries rally, also boosted by soft inflation and astrong 10-year auction. Yields end down as much as 7 bps, curvebull steepens slightly. * Oil hits a two-month high, rising more than 4% aftersources say the US is preparing to evacuate its Iraqi embassydue to heightened security concerns in the region. Brent crudereaches $69.77/bbl, WTI rises above $68/bbl. * Precious metals rise, led by a surge in platinum to a4-year high above $1,280/oz. Platinum rose as much as 5% and isup over 20% in June, which would be its best month since 2008. Good vibrations turn sour It's a "done" deal, according to U.S. President Donald Trump, although the he and Chinese leader Xi Jinping still have to finalize the wording of the trade agreement between the two superpowers and sign off on it. The main points of the deal appear to be: China will remove export restrictions on rare earth minerals and other key industrial components; U.S. tariffs on Chinese goods will total 55%; Chinese tariffs on U.S. goods will total 10%. Trump could not have been more enthusiastic in his praise for the agreement on Wednesday, and Commerce Secretary Howard Lutnick said 'deal after deal' with other countries will follow in the weeks ahead. Yet, judging by the relatively muted market reaction, investors are less enthused. And given the chaotic and unpredictable nature of the Trump administration's tariff announcements thus far, the irony of Treasury Secretary Scott Bessent calling on China to be a "reliable partner" in trade negotiations will not be lost on some observers. Especially, one suspects, in Beijing. Based on these proposed China levies, and with the US expected to conclude more trade deals in the coming weeks, the overall U.S. effective tariff rate will be lower than feared a couple of months ago. That's a relief. But the effective tariff rate of around 15% that many economists expect will still be significantly higher than the 2.5% rate at the end of last year, and would be the highest since the 1930s. Also, as the May inflation figures showed, tariffs have yet to be felt on prices. Investors - and Fed policymakers, who meet next week - are in a state of limbo. How will corporate profits and consumer spending be affected? What proportion of the tariffs will companies "swallow", and how much will they pass on to their customers? Zooming out, inflation appears to be cooling around the world, although this trend is expected to reverse once tariffs start to fuel higher goods price inflation. Figures on Wednesday showed that U.S. consumer inflation and Japanese wholesale inflation were lower than expected in May. These reports follow similar numbers from Europe recently, and China remains stuck in its battle against deflation. Next up is India, which releases consumer inflation figures on Thursday, which are expected to show annual inflation slowed to 3.0% in May, the lowest in more than six years. Another focus for investors on Thursday will be the auction of 30-year U.S. Treasury bonds. US stocks-bonds warnings flash amber again Calm has descended on U.S. markets following the 'Liberation Day' tariff turmoil of early April. But Wall Street's rally has revived questions about U.S. equity valuations, as stocks once again look super pricey compared to bonds. Since the chaotic days of early April, U.S. equities have rebounded fiercely, with the S&P 500 up 25%, putting the Shiller cyclically adjusted price-earnings (CAPE) ratio for the index in the 94th percentile going back to the 1950s, according to bond giant PIMCO. Stocks are looking expensive in absolute terms, and in relation to bonds. The equity risk premium (ERP), the difference between equity yields and bond yields, is near historically low levels. According to analysts at PIMCO, the ERP is now zero. The previous two times it fell to zero or below were in 1987 and 1996–2001. In both instances, the ultra-low ERP precipitated a steep equity drawdown and sharp fall in long-dated bond yields. "The U.S. equity risk premium ... is exceptionally low by historical standards," they wrote in their five-year outlook on Tuesday. "A mean reversion to a higher equity risk premium typically involves a bond rally, an equity sell-off, or both." But reversion to the mean doesn't just happen by magic. A catalyst is needed. Equities have recovered largely because they were oversold in April, trade tensions have been dialed down, and investors remain confident that Big Tech will drive solid AI-led earnings growth. So even though huge economic, trade, and policy risks continue to hang over markets, there is no sign of an imminent catalyst that would cause an equity market selloff. CHEAP FOR A REASON The flip side of equities looking expensive is that bonds look like a bargain. Indeed, the relative divergence between stocks and bonds is such that, by one measure, U.S. fixed income assets are the cheapest relative to equities in over half a century. Using national flow of funds data from the Federal Reserve, retired strategist Jim Paulsen calculates that the total market value of U.S. bonds as a percentage share of the total market value of U.S. equities is the lowest since the early 1970s. "Since the aggregate U.S. portfolio is currently aggressively positioned, investors may have far more capacity and desire to boost bond holdings in the coming years than most appreciate," Paulsen wrote last week. But bonds are 'cheap' for a reason. Washington's profligacy – the reason ratings agency Moody's recently stripped the U.S. of its triple-A credit rating – and inflation worries have kept yields stubbornly high. The term premium - the risk premium investors demand for holding long-term debt rather than rolling over short-dated loans - is the highest in over a decade, reflecting concerns about Uncle Sam's long-term fiscal health. And the diagnosis here shows no signs of improving. Trump's 'Big Beautiful Bill' is expected to add $2.4 trillion to the U.S. debt over the next decade, according to the nonpartisan Congressional Budget Office, likely putting more upward pressure on yields. Of course, equity investors do seem to be pricing in a very rosy scenario, and the past few months have shown how quickly the market landscape can change. The U.S. economy could weaken more than expected, the trade war could escalate, or there could be a geopolitical surprise that causes bond yields and equity prices to fall. Investors should therefore be mindful of the warnings being sent by ERPs and other absolute and relative valuation metrics. However, they should also remember that stretched valuations can get even more stretched. As the famous saying goes, markets can stay irrational longer than investors can remain solvent. What could move markets tomorrow? * India CPI inflation (May) * UK trade (April) * UK industrial production (April) * ECB's Jose Luis Escriva and Frank Elderson speak atseparate events * Brazil retail sales (May) * $22 billion U.S. 30-year Treasury note auction * U.S. weekly jobless claims * U.S. PPI inflation (May) Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. (By Jamie McGeever; Editing by Deepa Babington) Sign in to access your portfolio