Regal Rexnord’s Steady Dividend Amid Strong Stock Performance: A Dividend Investor’s Playbook

Regal Rexnord Corporation (NYSE: RRX) has reaffirmed its commitment to dividend-paying investors with its latest quarterly payout of $0.35 per share, maintaining a streak of uninterrupted dividends dating back to 1961. The second-quarter 2025 dividend, payable on July 14 to shareholders of record as of June 30, underscores the industrial conglomerate’s financial discipline. But how does this dividend fit into Regal Rexnord’s broader strategy—and what does it mean for investors looking for both income and growth?

Dividend Sustainability: A 64-Year Track Record

Regal Rexnord’s dividend has been a pillar of investor confidence for decades. With an annualized dividend of $1.40 per share (four $0.35 quarterly payments), the stock yields approximately 1.32%, a modest but reliable payout. The dividend’s sustainability is supported by a payout ratio of 47.4%, meaning earnings comfortably cover distributions. While the dividend grew steadily over the long term—rising from $0.25 per share in 2015 to its current level—the past year saw a 0% increase, a pause that may reflect cautious capital allocation in a volatile macroeconomic environment.

Investors should note that Regal Rexnord’s dividend history is not just about consistency but also resilience. Through recessions and industry downturns, the company has prioritized maintaining payouts, a trait that often attracts income-focused investors.

Business Momentum: Three Segments Driving Growth

Regal Rexnord’s value extends beyond dividends. The company operates through three segments:
1. Industrial Powertrain Solutions: Serves heavy industries like mining, energy, and construction with bearings, gearboxes, and power transmission systems.
2. Power Efficiency Solutions: Focuses on energy-efficient motors and controls for HVAC, agriculture, and commercial buildings.
3. Automation & Motion Control: Provides precision systems for aerospace, medical devices, and robotics.

These segments are positioned to capitalize on secular trends: automation adoption in manufacturing, sustainability mandates for energy-efficient equipment, and demand for advanced robotics. The company’s global footprint—30,000 employees across 120 countries—also buffers it against regional economic headwinds.

Stock Performance: Outpacing the S&P 500

Regal Rexnord’s stock has been a standout performer in 2025. As of April 28, its year-to-date return of 37.33% crushed the S&P 500’s 6.00%, while its 1-year return of 37.83% beat the benchmark’s 8.41%. This outperformance reflects investor optimism about its industrial exposure and dividend reliability.

Upcoming Earnings: A Key Test for Momentum

Investors will turn their attention to May 5, 2025, when Regal Rexnord reports its first-quarter 2025 earnings. Analysts will scrutinize revenue growth, margin health, and cash flow—critical metrics for sustaining the dividend and funding innovation. The company’s ability to navigate rising input costs and supply chain challenges will also be under the microscope.

A strong earnings report could catalyze further gains, especially if management signals renewed dividend growth or share buybacks. Conversely, a miss might test the stock’s valuation, currently trading at 17.5x trailing earnings—a premium to its five-year average of 15.8x but justified by its stable cash flows.

Conclusion: A Balanced Play for Income and Growth

Regal Rexnord offers dividend investors a rare combination: a 64-year dividend streak, a modest yield with room to grow, and exposure to high-growth industrial sectors. Its Q1 earnings will be pivotal, but the company’s long-term strategy—focusing on sustainable motion control and energy-efficient solutions—aligns with global demand trends.

With a dividend payout ratio under 50%, ample free cash flow generation, and a stock outperforming broader markets, Regal Rexnord appears positioned to reward both income seekers and growth-oriented investors. However, investors should monitor May’s earnings results closely; strong execution could solidify its status as a dividend stalwart in a changing industrial landscape.

Final Note: For income investors, Regal Rexnord’s reliability is a key draw. Pair this with its exposure to automation and energy efficiency—a $2.2 trillion global market by 2030—and the case for RRX becomes compelling. Yet, as with all industrial stocks, macroeconomic risks like a sharp economic slowdown remain. Stay tuned to May’s earnings call for clarity.