- With just 30 component stocks, the Dow Jones isn’t a very broad stock index. And since it’s full of the big blue chips that never wiggle more than
a percent or two in a single trading session, it’s often seen as a stodgy grouping of companies without much to offer investors. But while the Dow
certainly has its detractors among short-term traders with a need for instant gratification, these big-name blue chips have a lot of appeal to conservative
investors. And some of the biggest selling points for Dow stocks are their healthy dividends.
In fact, the “worst” dividend stock out of the top 10 high dividend yield components returns an even 3% annual rate. If you’re looking for
stable stocks with a hefty dividend payout, the Dow is full of them. To help you get your share, here is an updated list of the Top 10 Highest-Yielding
Dow Dividend Stocks.
Dow Dividend Stock #10 – Johnson and Johnson (JNJ)
Market Cap: $180.3 billion
Annual Dividend: $1.96
Dividend Yield: 3.0%
Health care products giant Johnson and Johnson (JNJ) is the
company behind profitable brands like Tylenol, Sudafed and Listerine. JNJ has posted strong quarterly profits in each of the last four quarters, topping
expectations every time, and reported strong earnings on April 20 with profits up 29%. Johnson and Johnson boosted its quarterly dividend in
spring of 2009 for the 47th consecutive year, and it’s realistic to think that the company will do so again at some point in 2010. With popular
products projected to rake in over $64 billion in revenue this year, JNJ will have plenty of profits to share.
Dow Dividend Stock #9 – Coca Cola (KO)
Market Cap: $125.1 billion
Annual Dividend: $1.76
Dividend Yield: 3.2%
Coca-Cola (KO) raised its dividend in mid-February by over 7%
after a strong sjowing at the end of 2009. The strength of Coke’s international
sales continue to be a huge source of growth for this company. It its fourth-quarter earnings report, Coke’s profit soared 55% in the fourth-quarter
compared with 2009 thanks to a 5% increase in worldwide beverage sales. Coca Cola most recently reported earnings on April 20 that include a 19% rise in first-quarter profits due to strong overseas sales.
Dow Dividend Stock #8 – McDonald’s (MCD)
Market Cap: $74.4 billion
Annual Dividend: $2.20
Dividend Yield: 3.2%
McDonald’s (MCD) has raised its dividend each and every year
since paying its first dividend in 1976 and remains one of the most reliable dividend providers on Wall Street. The largest fast-food chain in the
world continues to be as dominant as ever, with almost 32,000 locations worldwide. This global reach has been great for McDonald’s recently,
since a slight drop in U.S. sales was more than offset with an impressive fourth-quarter growth rate of 4.3% in Europe, Asia, the Middle East and
Africa. MCD earnings on April 21 were strong.
Dow Dividend Stock #7 – Chevron (CVX)
Market Cap: $163.9 billion
Annual Dividend: $2.72
Dividend Yield: 3.4%
In August 2009, Energy giant Chevron (CVX) declared a 4.6% increase to its quarterly
dividend to 68 cents per share (or $2.72 a year). As crude oil prices have broken through $85 and look to move higher, CVX stock could see bigger
gains ahead and more incentive for another dividend increase. The company has consistently increased its dividends for more than two straight decades.
Chevron reports first-quarter earnings on April 30.
Dow Dividend Stock #6 – Kraft Foods (KFT)
Market Cap: $46.0 billion
Annual Dividend: $1.16
Dividend Yield: 3.8%
After consistently raising dividends every year since it went public in 2001, Kraft Foods (KFT)
hit the brakes in 2009 by freezing its dividend. However, there may be a boost in the works sometime soon to the company’s already high 3.9%
dividend yield. The world’s second-largest food company reported strong fourth-quarter profits in February that were quadruple the numbers from last
year thanks to a successful three-year restructuring of its business. It is set to report first-quarter earnings on May 6. The company’s recent
acquisition of British snack maker Cadbury should also keep KFT firmly in the black with plenty of profits to share.
Dow Dividend Stock #5 – Merck (MRK)
Market Cap: $112.3 billion
Annual Dividend: $1.52
Dividend Yield: 4.1%
Merck (MRK) is one of the biggest names in big pharma, with
blockbuster drugs that include the heart disease treatment Zocor, asthma and allergy drug Singulair and osteoporosis medication Fosamax. But while
these treatments are relatively new discoveries, Merck is an old company with a long history of dividend payouts — more than five decades to be exact.
After buying out competitor Schering-Plough in mid-2009, MRK has tapped into a greater range of products and research that should renew the company’s
momentum. With a 4.1% dividend yield, investors have a healthy incentive to go along for the ride. Merck reports earnings May 4.
Dow Dividend Stock #4 – Pfizer (PFE)
Market Cap: $137.1 billion
Annual Dividend: $0.72
Dividend Yield: 4.2%
One of the biggest names in big pharma, Pfizer (PFE) is the
brains behind blockbuster cardiovascular medications Lipitor (for elevated cholesterol), Norvasc (for high blood pressure) and Caduet (for angina).
Pfizer is a high yield dividend stock that has moved up among Dow Jones ranks. PFE just paid a dividend in early March of 18 cents on the quarter,
a 12.5% increase over the previous quarter and boosting its annualized dividend to 72 cents. Pfizer reports earnings alongside fellow big pharma dividend
stock Merck on May 4.
Dow Dividend Stock #3 – Dupont (DD)
Market Cap: $35.5 billion
Annual Dividend: $1.64
Dividend Yield: 4.2%
DuPont (DD) just paid out a first-quarter dividend of 41 cents
per share in March, marking the 418th consecutive quarterly dividend since the company’s first dividend in the fourth quarter of 1904. While
many things on Wall Street are uncertain, DD’s dividend is all but a sure thing. This high yield dividend stock is scheduled to report first
quarter earnings on April 27 and is looking to build on a record of four straight earnings surprises.
Dow Dividend Stock #2 – Verizon (VZ)
Market Cap: $83.8 billion
Annual Dividend: $1.90
Dividend Yield: 6.3%
In September of 2009, Verizon’s Board approved a quarterly dividend increase of 3.3% as a sign that the company was getting back on track. This
marked the third consecutive year of a Verizon (VZ) quarterly
dividend increase. As Verizon
sells the iPhone this summer it should see continued success. And even if it takes a while to prime the pump, shareholders can take comfort in
VZ’s high dividend yield of over 6%.
Dow Dividend Stock #1 – AT&T (T)
Market Cap: $154.9 billion
Annual Dividend: $1.68
Dividend Yield: 6.4%
From the end of 1999 up until December 2009 this dividend growth stock has delivered a negative annual average total return of about -11% to its
shareholders. Ouch! But on the plus side, AT&T (T) remains
one of the biggest dividend providers in the Dow. While many traders will scoff at a “lost decade” in the stock market, an annual payout
of $1.68 per share as of this writing (and a track record of slow and steady dividend growth) is certainly nothing to scoff at. Look for T stock earnings
on April 21.
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