When market volatility is high, it can be challenging to find reliable stocks. Although no investment in public equities is completely safe, companies that have a track record of paying and raising their dividends over time offer a powerful indication of consistency.

Supporting a dividend and gradually increasing it year after year is a sign that a company is growing its earnings and cash flows, and prioritizes the dividend as a means to transfer profits directly to investors. Dividend Kings are a rare breed of companies that have paid and raised their dividends annually for at least 50 consecutive years. Genuine Parts Company (GPC -0.29%), Illinois Tool Works (ITW -0.57%), and Emerson Electric (EMR 0.83%) stand out as three dividend stocks to buy in November and hold over the long term.

A worker wearing personal protective equipment working in a factory.

Image source: Getty Images.

Park Genuine Parts in your portfolio for some passive income

Scott Levine (Genuine Parts): Whether you're a young person starting out on your investing journey or you're a veteran who bears the scars of having survived some market downturns, fortifying your portfolio with conservative stocks is always a smart choice.

An even smarter strategy, though, is to buttress your holdings with a stalwart company committed to shareholders -- one like Genuine Parts, which currently offers a forward dividend yield of 2%. How sincere is the commitment? For 66 consecutive years, Genuine Parts has increased its dividend, making it one of the longest-tenured Dividend Kings.

Since its founding in 1928, Genuine Parts has grown to become a leading distributor of automotive replacement parts and industrial replacement parts. As anyone who's recently been shopping for a new car knows, the automotive market has hit a bumpy road. Thanks to supply chain disruptions and rising interest rates, vehicles are frequently selling for above sticker price. Consequently, many drivers are choosing to stay with their old cars, making repairs instead of ponying up big bucks for a new set of wheels -- a circumstance that should benefit Genuine Parts.

In addition to the impressive track record of raising the payout to shareholders for more than six decades, the company's strong financial position suggests that Genuine Parts is a smart choice for risk-averse investors. For example, the company maintains a conservative reliance on leverage. As of the end of the third quarter, Genuine Parts had a net ratio of debt to earnings before interest, taxes, depreciation, and amortization (EBITDA) of 1.3. Similarly, management is keeping a balanced approach to returning capital to shareholders. Currently, the payout ratio is 42%.

Illinois Tool Works is an ideal dividend stock to own for decades

Daniel Foelber (Illinois Tool Works): Illinois Tool Works (ITW) is an industrial conglomerate with a diverse mix of business lines and an international reach. All seven of ITW's segments offer a great deal of exposure to the broader economy, and their performance can ebb and flow based on the business cycle.

But ITW is unique in that no single segment dominates its revenue and operating income. And its business as a whole has a high operating margin, which leads to steady free cash flow that can be used toward consistent dividend raises. Here's a look at the performance by segment for the nine months ended Sept. 30.

Segment

Total Revenue (Loss)

Operating Income

Operating Margin

Automotive OEM

$2.224 billion

$371 million

16.7%

Food equipment

$1.813 billion

$445 million

24.5%

Test & measurement, and electronics

$2.096 billion

$486 million

23.2%

Welding

$1.413 billion

$431 million

30.5%

Polymers & fluids

$1.450 billion

$362 million

25%

Construction products

$1.643 billion

$428 million

26%

Specialty products

$1.337 billion

$362 million

27.1%

Intersegment

($15 million)

   

Total segments

$11.961 billion

$2.885 billion

24.1%

Data source: Illinois Tool Works. OEM = original equipment manufacturer. 

Notice that no single segment makes up more than 20% of revenue or 20% of operating income. ITW's goal is to have a 28% operating margin, annual growth in earnings per share (EPS) of 7% to 10%, and a 50% dividend payout ratio -- meaning ITW's dividend per share will only be half of its EPS. So investors can expect annual dividend raises of about 3% to 5% per year.

ITW isn't the fastest-growing company. Rather, its investment thesis is grounded in consistency and profitability, making it an ideal stock for risk-averse investors focused on passive income. ITW has a dividend yield of 2.4%. It has paid and raised its dividend annually for over 50 years. 

Emerson Electric: The future is automated

Lee Samaha (Emerson Electric): The ongoing trend for industrial conglomerates to break up continues with the news that Emerson Electric will sell its major stake in its climate technologies business to Blackstone for $9.5 billion in cash, with Emerson retaining a 45% stake in the new company. 

The deal is another move by CEO Lal Karsanbhai to focus Emerson on its core automation-solutions business. It's an attractive market driven by two important megatrends. The first is the transformation of the industrial world, whereby internet-enabled digital technology is enhancing the productivity of automation -- a red-hot industry to invest in. Indeed, earlier this year, Emerson took a step in the digital direction by contributing its industrial software business to AspenTech, a company focued on heavy-industries software, for a 55% stake in the new company.

The second megatrend is the movement toward restoring domestic sourcing for the supply chain and manufacturing in light of the supply chain crisis of 2022. Investing in automation is key to making it cost-effective to return manufacturing ("reshoring," or the opposite of "offshoring") from countries with low labor costs. 

These trends are so powerful that they have convinced other industrial giants, namely ABB and Siemens, to also focus on their core automation and digital technology businesses. 

Management sees significant value creation coming from the deal to sell its majority stake in the climate technologies segment, since it will allow Emerson to make strategic acquisitions in automation. Moreover, management says that its dividend remains a priority, so investors can look forward to the company continuing its 65-year run of annual dividend hikes.